Income Tax: If you keep cash at home then understand these rules, the Income Tax department can take action..

In today's time, most people prefer to do online transactions instead of cash. But still, the need for cash has not been reduced. Even today, transactions are done in cash in business, etc. Apart from this, people who are not UPI-friendly also use cash. Due to this, people also keep cash in their homes. But if you have kept a lot of cash at home, then you should understand some rules because if there is even a slight mistake in this matter, then the Income Tax Department can take action against you.

Is there any limit to keeping cash?

According to the 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 should have the source of that amount. If you are ever questioned by the investigating agency, then you will have to show the source. Along with this, the ITR declaration will also have to be shown.

What will happen if you are unable to tell the source?

If you are unable to tell the source of money, then it can be a big problem for you. In such a case, the income tax department checks how much tax you have paid. If undisclosed cash is found in the calculation, then the income tax department can take action against you. In such a case, a hefty penalty can be recovered from you.

Arrest can happen in such cases.

Many times we see in the news that IT raids are conducted at the house of some bureaucrat, officer, or businessman, and cash worth lakhs and crores of rupees is found. This cash is unauthorized. The income tax department asks the source of that income before taking action. When the person is unable to give information about the source of income, then action is taken. In such a case, his cash is confiscated. Penalty is also imposed on the person and many times he is also arrested. Overall, whatever cash you keep at home, you need to have its source.

What are the other rules in the case of cash?

According to the Central Board of Direct Taxes, if you withdraw or deposit more than Rs 50,000 in cash from your bank account at one time, then you will have to show your PAN card.

What is Section 194N of the Income Tax Act?

Under Section 194N of the Income Tax Act, if a person who has not filed an Income Tax Return (ITR) for the last 3 years withdraws more than Rs 20 lakh from the bank in a financial year, then he will have to pay 2% TDS on transactions of Rs 20 lakh and up to 5% TDS on transactions of more than Rs 1 crore. People who have filed ITR get some relief in this matter. Such people can withdraw up to Rs 1 crore in cash in a financial year from a bank, post office, or cooperative bank account without paying TDS. 2% TDS will have to be paid if more than Rs 1 crore cash is withdrawn from the bank in a year.

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