Cash Limit: Today most of the transactions are happening online, yet many people prefer to keep cash at home for emergency or convenience. But the question is, is there any legal limit on keeping cash at home? What rules does the Income Tax Department make for this and what can be the risk of keeping it without disclosing the source?
Cash Limit At Home: In today’s digital lifestyle, most people do everything online, from paying electricity bills to mobile recharge, yet the habit of keeping cash at home has not ended. Many people consider it a safe option for emergency or sudden expenses. But when it comes to keeping a large amount of money, a question arises in people’s mind – is there any limit to keeping cash at home? Does the Income Tax Department make any rules on this? And if the source of the money kept at home cannot be disclosed, what problems can arise?
This topic is also important because due to lack of correct information, many people can unknowingly come under the purview of the law. In such a situation, it becomes important to know whether keeping cash at home is completely legal or some necessary conditions have to be fulfilled for this.
Is there any limit to keeping cash at home?
According to the Income Tax Department, there is no legal restriction on how much cash can be kept at home. That is, you can keep as much cash as you want according to your convenience. However, it is important that this money is a part of legitimate income and its source is clear.
Why is it important to have proof of source?
Even though there is no fixed limit for keeping cash, the tax department looks at where this money came from. If you are unable to provide proof of this, then it can be considered undeclared income. Therefore, whether it is salary, business income or money from selling property, it is important to keep a record of every source safe.
Importance of ITR and documents
If the cash you have is visible in your Income Tax Return (ITR), then you can easily answer any inquiry. It is also important to keep the receipt or agreement of the amount received on selling the property safe. Correct documents not only save you from legal problems, but also prove your financial position strong.
What can be the harm without proof?
If the tax department finds cash in your house and its source cannot be explained, then there can be a heavy penalty or legal action. In many cases, there is a provision of penalty on undeclared income as well as jail sentence. Therefore, keeping cash is not wrong, but it is very important to prove its accountability.
