The government has tightened income tax rules related to cash. Now, cash kept at home without proper information can be subject to up to 84% tax and penalties. Banks send information about large cash withdrawals directly to the Income Tax Department.
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The government has tightened income tax rules related to cash even more than before. Now, cash kept at home without proper information can be subject to up to 84% tax and penalties. Banks send information about large cash withdrawals directly to the Income Tax Department. Therefore, anyone thinking that cash kept at home is safe and undetected by the department will need to be even more cautious. The new rules aim to curb black money and unaccounted transactions, but fear and questions are also rapidly increasing among the public.
Banks Now Report Large Cash Withdrawals
If you withdraw more than ₹10 lakh from your savings account in a year, the bank will report this information to the Income Tax Department. If the withdrawal exceeds ₹20 lakh, the bank will also deduct TDS. This doesn’t mean you’ve done anything wrong, but the department will look into how the money was used and whether you’ve spent or held cash in excess of your income.
In some cases, the government imposes a 100% penalty on cash transactions. This means the penalty is based on the amount of cash transferred or received.
Sale deed of property for cash exceeding Rs 20,000 (seller to pay full penalty)
Any loan taken in cash, regardless of the amount.
Sales of more than ₹2 lakh in cash from a single customer in a single day.
Be it a shop or business, accepting more than ₹2 lakh in cash from a single customer in a single day can result in a 100% penalty. Sarthak Ahuja said that the department monitors both digital and cash transactions, so it is wrong to assume that transactions will go undetected.
Public Concerns Also Increased
Many people on social media expressed concern about this strictness. Some said that surveillance of ordinary people is increasing, while action against high-profile individuals is less. One user wrote that withdrawing ₹10 lakh is not a big deal these days, so why so much fear? Many people questioned that money withdrawn from banks is already legal, so why so much strictness about keeping it at home?
If there is a complete record, then there is nothing to worry about.
Bank Statement
Proof of Income
Old Bills
Important Receipts
Calculating Digital Payments
Most people are making digital payments these days because it automatically records transactions and makes it easier to explain later.
What to do?
Avoid large cash transactions.
Stay excess cash at home and deposit it in the bank.
Make any large sales purchases digitally.
Holding cash without proof could prove costly.
The new system simply means keeping money transactions transparent.
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