Cash at Home Can Get Expensive! New Tax Rules May Attract Up to 84% Penalty

The government has made rules related to cash stricter than ever. Now, keeping unaccounted cash at home can attract up to 84% tax and penalty. Banks report large cash withdrawals directly to the Income Tax (IT) department.

Monitoring of Large Cash Transactions

• If you withdraw more than ₹10 lakh from your savings account in a year, the bank will report it to the IT department.

• Withdrawals above ₹20 lakh may also attract TDS deduction by the bank.

• This doesn’t necessarily mean wrongdoing, but the department will verify whether the money was used legitimately and if the cash held exceeds reported income.

Cash Transactions With Heavy Penalties

• Cash received from property sales above ₹20,000 may attract penalties.

• Loans taken in cash, regardless of amount, are also monitored.

• Businesses accepting over ₹2 lakh cash from a single customer in a day could face a 100% penalty.

Experts say the department monitors both digital and cash transactions, so assuming your cash transactions go unnoticed is risky.

How to Stay Safe

• Avoid large cash transactions whenever possible.

• Deposit excess cash in banks instead of keeping it at home.

• Make major purchases digitally to maintain clear records.

• Keep all receipts, bank statements, and proof of income for verification.

Key Takeaway: Keep your transactions transparent—digital payments and proper documentation reduce risk under the new cash regulations.