Income Tax Cash Limit: Know the rule of keeping cash at home otherwise Income Tax Department will take action..
Digital transactions have increased rapidly since the Corona period. Now a large population prefers to do online transactions. But even after this, all types of transactions are still done through cash. At the same time, people who are not internet-friendly also prefer to complete all their work through cash instead of online transactions.
Because of this, people still keep a lot of cash at home. But to control problems like tax evasion and black money, the government has made many rules regarding cash. In such a situation, there is a question that comes to mind many times, but we do not discuss it and that is how much cash can you keep at home? Know about it here-
What are the rules for keeping cash?
According to Income Tax rules, no special rule or limit has been made in the matter of keeping cash at home. If you are financially capable then you can keep any amount of cash at home. But you must have a source for that amount. If ever you are interrogated by the investigating agency, you will have to show the source. Besides, the ITR declaration will also have to be shown. This means that if you have not earned money by the wrong means, then no matter how much cash you keep at home, you do not need to worry.
Action can be taken in these situations
If you are not able to tell the investigating agency the source of the money, then it can be a big problem for you. In such a situation, the investigating agency is informed about this matter. Then the Income Tax Department checks how much tax you have paid. Meanwhile, if undisclosed cash is found in the calculations, then action can be taken against you by the Income Tax Department. In such a situation, a tax of up to 137% of the undisclosed amount can be charged to you.
What are the other rules regarding cash?
According to the Central Board of Direct Taxes, if you withdraw more than Rs 50 50,000 at a time, you will have to show your PAN card. Under Section 194N of the Income Tax Act, if a person withdraws more than Rs 20 lakh in a financial year, he will have to pay TDS. However, this rule is only for those people who have not filed an Income Tax Return (ITR) for 3 consecutive years.
People who have filed ITR get some relief in this matter. Such people can withdraw cash up to Rs 1 crore in a financial year from the bank, post office, or co-operative bank account without paying TDS. In this situation, if more than Rs 1 crore is withdrawn from the bank in a year, 2% TDS will have to be paid. If you have not filed an ITR for the last three years, then you will have to pay 2% TDS on transactions of Rs 20 lakh and 5% on transactions of more than Rs 1 crore.
Transactions above Rs 1 lakh at a time through credit-debit cards may be subject to scrutiny. Apart from this, you cannot pay more than Rs 2 lakh in cash to buy anything. If you want to do this, you will have to show PAN and Aadhaar here also.
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