To tackle the problem of tax evasion and prevalence of black money there are several rules made by the Government of India regardinghow much cash can be kept in one’s possession and also regarding cash transactions. Therefore, a basic question that arises is whether there isany limits on how much cash can be kept at home? Keeping cash at home depends on two things, your financial capability and your transactional habit.
With regards how much cash can people keep in their homes, then there are no such limits as tohow much cash can be kept at homes. You cankeep as much cash at home as people want. The only that needs to be remembered is that you should have a record of each and every penny and also have evidence of the source of your income and whether you have paid your taxes or not.
According to the income tax rules, you can keepany amount of cash at home. Just in case youget caught by the investigating agency for anyreason, then you will have to prove its source. Along with this, ITR declaration will also have to be shown. If you are not able to do this then action can be taken against you. After demonetisation, the Income Tax had said that if undisclosed cash is found in your house, then upto 137 per cent of the total recovered amountcan be taxed.
According to the rules of the Central Board of Direct Taxes, you have to show your PAN cardwhenever you deposit cash or make cashwithdrawals of above Rs 50,000 at a time. If you deposit more than 20 lakh cash in a year, then hewill have to show your PAN and Aadhaar card. Ifyou fail to do so then a fine of up to 20 lakhs canbe imposed upon you
Limits on cash transactions, that you need to know
- 2 per cent TDS will have be paid if more than 1 crore cash is withdrawn from the bank in a year.
- Cash transactions of more than 20 lakhs in a year can attract a fine. The purchase and sale of cash property of more than 30 lakhs can be investigated.
- Can’t pay more than 2 lakh in cash to buy anything. If you want to do this, you will have to show PAN and Aadhaar here too.
- Transaction above Rs 1 lakh at a time with credit-debit card can investigated.
- An amount of more than 2 lakhs cannot be taken from a relative through cash in a day, this work will have to be donethrough the bank again.
- You cannot take a loan above Rs 20,000 in cash from anyone else.
- You cannot donate more than 2,000 cash.
