July 24, 2024

Explained: How Much Cash You Can Keep At Home, What Are The Income Tax Rules In This Regard

Explained: How Much Cash You Can Keep At Home, What Are The Income Tax Rules In This Regard?

According to the Income Tax Act, there’s no specific restriction on the amount of money stored at home. However, during an income tax raid, it becomes crucial for an individual to substantiate the source of the money.

NEW DELHI: In the aftermath of Income Tax raids revealing a staggering Rs 351 crore in cash at Congress MP Dhiraj Prasad Sahu’s premises, the politician has broken his silence, asserting the funds stem from his family’s liquor business, vehemently disassociating it from any political affiliations.

Speaking exclusively to news agency ANI, Sahu expressed his dismay, stating, “In the last 30-35 years of my political career, this is the first time that this kind of incident has taken place, due to which I am hurt.

What is happening today makes me sad. I can admit that the money that has been recovered belongs to my firm. The cash that has been recovered is related to my liquor firms; it is the proceeds from the sale of liquor.”

Understanding Cash Limits: What the Income Tax Rules Say?
Against the backdrop of this high-profile raid, questions arise about the permissible limits of cash holdings at home and the implications of the latest Income Tax rules.

According to the Income Tax Act, there’s no specific restriction on the amount of money stored at home. However, during an income tax raid, it becomes crucial for an individual to substantiate the source of the money. Unaccounted funds can result in penalties, with income tax officials authorized to seize the unexplained money, imposing fines of up to 137% of the total amount.

Crucial Cash Rules To Remember
No Acceptance Of Rs 20,000 or More in Cash for Loans or Deposits: The income tax department strictly prohibits any person from accepting Rs 20,000 or more in cash for loans or deposits.

PAN Numbers Mandatory For Transactions Above Rs 50,000: According to the Central Board of Direct Taxation, individuals must provide PAN numbers for deposits or withdrawals exceeding Rs 50,000 at a time.

Scrutiny Of Cash-Based Asset Transactions Above Rs 30 Lakh: Indian citizens engaging in the purchase or sale of assets via cash exceeding Rs 30 lakh may come under the scrutiny of investigating agencies.

Investigation Into Credit-Debit Card Transactions Above Rs 1 Lakh: Payment exceeding one lakh rupees through credit or debit cards at a time may trigger investigations.

2% TDS on Withdrawals Exceeding 1 Crore: Individuals withdrawing more than Rs 1 crore in cash from the bank in a year are liable to pay a 2% TDS.

Fine For Cash Transactions Over 20 Lakhs: Cash transactions surpassing 20 lakhs in a year may attract penalties, while the purchase and sale of cash property over 30 lakhs can prompt investigations.

Caps On Cash Payments: Limits include not paying more than 2 lakh in cash for purchases without PAN and Aadhaar details, and restrictions on transactions above Rs 1 lakh with credit-debit cards.

Family Transactions And Loans: Receiving more than Rs 2 lakh in cash from a relative in a day or taking a loan above Rs 20,000 in cash from anyone else is prohibited.

Understanding these rules is paramount to avoiding legal repercussions and ensuring compliance with income tax regulations.zN

(JKNEWS NATION)

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