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Cash Limit at Home: How much cash can be kept at home, know income tax rules about cash limits


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Cash Limit at Home: Many people are unaware of the permissible limits of cash at home and the related Income Tax rules. In this article, we will tell you the income tax rules about cash limits at home and what is the maximum amount of money that you can keep in your home.

Cash Limit at Home: How much cash can be kept at home

According to the Income Tax Act, there is no rule that specifies the amount of money that can be kept at residence. It means you can keep as much money as you want in your home. However, an individual has to give proof of his income if any substantial cash is found at his/her home.

If the Income Tax department conducts a raid and huge amounts of cash holdings are found, then it becomes necessary for an individual to give proof of the source of the money. If the I-T officials find unaccounted cash, the department can impose penalties and seize the money. The Income Tax department has the authority to impose a penalty of fines up to 137 per cent of the total unaccounted amount.

I-T rules for for accepting certain loans, deposits

The Income Tax department categorically states there should be no acceptance of Rs 20,000 or more in cash for loans or deposits, which means that I-T rules prohibit any person from accepting Rs 20,000 or more in cash for loans or deposits.

The I-T department has made PAN numbers mandatory for transactions above Rs 50,000.

Any person engaging in the purchase or sale of assets via cash exceeding Rs 30 lakh is expected to come under the the scrutiny of Income Tax department.

Limits on credit and debit card payments

According to Income Tax rules, transactions of more than Rs 1 lakh made via Credit or Debit Card, may invite investigations.

People are liable to pay 2 per cent TDS for withdrawing more than Rs 1 crore in cash from the bank in a year.

Income tax rules say that cash transactions exceeding 20 lakhs in a year may attract penalties.

I-T rule says that receiving over Rs 2 lakh in cash from a family member in a day or taking a loan above Rs 20,000 in cash from anyone else is prohibited.

One Comment

  1. Does this rule apply to credit cooperative societies.
    These societies deal 95% in cash avove 20000, which authority to report n share proofs.

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