Digital transactions become more prevalent in India, many citizens are still relying on traditional methods of keeping money at home. There are limitations on how much can be kept in a house, nevertheless. The Income Tax act does not impose a limit on the amount of money that can be stored at home, but if income tax officials conduct a raid, a person must present the source of the money. The money should not be unaccounted for in income, and if the documents do not match the amount of money kept in the house, income tax officials can penalize the individual. The unaccounted money can be seized in certain situations by income tax personnel, and a fine of up to 137 percent of the total amount of money may be assessed.
To avoid such penalties and safeguard oneself and their family, it is important to remember the rules related to cash formulated by the income tax department. For instance, no person is allowed to accept cash worth Rs 20,000 or more for any loan or deposit. This rule also applies to transfers of immovable property of the person. Cash transactions exceeding Rs 20 lakh in any financial year can attract a penalty only if they are unaccounted for and unsourced.
Additionally, the Central Board of Direct Taxation mandates that PAN numbers and related information be presented when depositing or withdrawing more than Rs 50,000 at once. An account holder must provide their PAN and Aadhaar details if they deposit Rs 20 lakh in cash in a single year.
Any Indian citizen may be subject to investigation by the investigating body if the sale or purchase of assets is paid for in cash in an amount greater than Rs 30 lakh. If a cardholder uses their credit or debit card to make more than one lakh rupees in a single transaction, there may be cause for investigation. Additionally, it is not possible to withdraw approximately Rs 2 lakh in cash from family members in a single day; instead, the transaction must be authorised by the bank.
Limits on cash transactions, that you need to know