Cash Limit Rule: If you also keep it at home to avoid the hassle of going to the bank or ATM, then the question must be arising in your mind that how much cash can we keep in our home. Let us tell you today what are the tax rules regarding keeping cash at home.
There are many rules on cash possession and transactions in the country to remove problems like tax evasion or black money. A basic question is, is there any limit on how much cash can be kept at home? Keeping cash at home depends on two things, your financial capacity and your transaction habits. If you keep a large amount of cash at home, then let us tell you here that there is no rule that you can keep cash at home within a limit only.
No rule forces you to keep cash within a limit. If you are able, you can keep as much cash at home as you want. The only rule to remember is that you should have an account of every penny, what is the source of your income and whether you have paid tax or not.
According to income tax rules, you can keep any amount of cash at home. If for any reason you are caught by the investigating agency, you will have to prove its source. Besides 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 demonetization, Income Tax had said that if undisclosed cash is found in your house, then tax can be imposed up to 137% of the total amount recovered.
But there is a limit on cash transactions, it is very important to know this
According to the rules of the Central Board of Direct Taxes, you have to show PAN card for cash deposits or withdrawals above Rs 50,000 at a time. If a person deposits more than Rs 20 lakh in cash in a year, he will have to show PAN and Aadhar card. If not shown, a fine of up to Rs 20 lakh can be imposed.
If you withdraw more than Rs 1 crore cash from the bank in a year, you will have to pay 2% TDS.
Penalty on cash transactions may be imposed on cash transactions of more than Rs 20 lakh in a year. Buying and selling of cash property worth more than Rs 30 lakh may be investigated.
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.
Transactions above Rs 1 lakh at a time through credit-debit cards may be subject to scrutiny.
You cannot take an amount of more than Rs 2 lakh in cash from any relative in a day, this work will have to be done again from the bank. You cannot take a loan of more than Rs 20 thousand in cash from anyone else.
You cannot donate more than Rs 2,000 in cash.