Even though digital transactions are becoming more common in India, many people still keep their money at home using old-fashioned methods. However, the amount that can be kept in a house is limited. The Income Tax Act does not limit the amount of money that can be kept at home; however, if income tax officials want to raid a person’s home, they must show where the money came from.
If the documents do not match the amount of money kept in the house, income tax officials may penalize the individual. The money should not be unaccounted for in income. In certain circumstances, income tax personnel may seize the unaccounted funds and impose a fine of up to 137% of the total amount.
It is essential to keep in mind the income tax department’s cash rules in order to avoid such penalties and protect oneself and their family. For example, no individual is permitted to acknowledge cash worth Rs at least 20,000 for any loan or deposit.
Transfers of the person’s immovable property are also subject to this rule. Only if the cash transactions exceed Rs 20 lakh in any given fiscal year are unaccounted for and unsourced will result in a penalty.
When depositing or withdrawing more than Rs 50,000 simultaneously, the Central Board of Direct Taxation mandates that PAN numbers and related information be presented. If an account holder deposits Rs 20 lakh in cash in a single year, they must provide their PAN and Aadhaar information.
If the sale or purchase of assets is paid for in cash in an amount greater than Rs 30 lakh, the investigating body may conduct an investigation into any Indian citizen. There may be grounds for an investigation if a cardholder uses their credit or debit card to make more than one lakh rupees in a single transaction.
In addition, it is impossible to cash out more than Rs 2 lakh from family members in a single day; instead, the bank must authorize the transaction.
