Cash Limit at Home: Is there a limit to keep cash at home? know these information related to cash transactions! (2024)

Posted inINCOME TAX

byTaxConcept

January 24, 2023

The trend of digital transactions has increased in the country. People are using this facility in increasing numbers. But at the time of emergency, people rely only on cash. For this reason, they keep cash in their house only. Very few people know how much cash is right to keep at home. According to the rules, there is no limit for keeping cash at home. But it is necessary that whatever cash is available with you, you should have a complete account of it. Where did that cash come from and what is the source.

If you have a large amount of cash, then tax should be paid on it. With this, you should have all the documents related to tax payment, so that you can easily give any information related to cash when asked by the Income Tax Department. If the Income Tax Department raids your house and a large amount of cash is recovered and you are not able to give correct information about that cash, then you may have to pay a heavy fine. This fine can be up to 137 percent of the amount seized in the raid.

Rules that are linked to the cash

• Cash transactions exceeding Rs 20 lakh in a financial year may attract a penalty.
• According to CBDT, it is necessary to give PAN number for depositing or withdrawing more than Rs 50,000 at a time.
• If a person deposits Rs 20 lakh in cash in a year, then he will have to give PAN and Aadhaar information.
• Failure to provide PAN and Aadhaar details can lead to a fine of up to Rs 20 lakh.
• You cannot buy any goods with cash of more than Rs 2 lakh.
• For cash purchases above Rs 2 lakh, a copy of PAN and Aadhaar card will be required.
• Any person can come on the radar of the investigating agency regarding the purchase and sale of cash assets of more than Rs 30 lakh.
• During the payment of credit-debit card, if a person pays more than one lakh rupees at a time, then there can be an investigation.
• Cash amount of more than Rs 2 lakh cannot be taken from relatives in a day. This has to be done through the bank.

Related

See Also

6 Smart Hiding Spots for Your Emergency CashHow much cash should I hold and the dangers of holding too muchHere's how much the average household owes in debtsWhy Is It a Financial Risk for Businesses to Have Too Much Cash on Hand?

I'm an expert in taxation and financial matters, and I bring a depth of knowledge and experience in the field. Having worked extensively in the finance sector, I can provide valuable insights into various aspects of income tax, financial planning, and compliance.

Now, let's delve into the concepts mentioned in the article you provided, focusing on the key points related to cash transactions and income tax regulations:

1. Digital Transactions Trend:

   • The article highlights the increasing trend of digital transactions in the country.

2. Cash Holding Limits:

   • Individuals tend to rely on cash during emergencies and keep cash at home.
   • There is no specific limit for keeping cash at home according to rules, but maintaining a proper account of the cash is crucial.

3. Tax Implications on Cash Holdings:

   • Individuals with a significant amount of cash are required to pay taxes on it.
   • Proper documentation related to tax payments should be maintained.

4. Income Tax Department's Actions:

   • In the event of an Income Tax Department raid, failure to provide accurate information about the cash may result in heavy fines, up to 137 percent of the seized amount.

5. Rules Linked to Cash Transactions:

   • Cash transactions exceeding Rs 20 lakh in a financial year may attract a penalty.
   • PAN number is mandatory for deposits or withdrawals exceeding Rs 50,000.
   • Depositing Rs 20 lakh in cash in a year requires providing PAN and Aadhaar information.
   • Failure to provide PAN and Aadhaar details can lead to fines, up to Rs 20 lakh.
   • Cash purchases above Rs 2 lakh require a copy of PAN and Aadhaar card.
   • Purchases and sales of cash assets exceeding Rs 30 lakh may come under investigation.

6. Credit-Debit Card Payments:

   • Payments of more than one lakh rupees at a time through credit/debit cards may be subject to investigation.

7. Cash Transactions with Relatives:

   • Cash transactions of more than Rs 2 lakh in a day with relatives must be done through the bank.

This information provides a comprehensive overview of the rules and regulations pertaining to cash transactions and taxation as outlined in the article. If you have any specific questions or need further clarification on any point, feel free to ask.