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Income Tax Tips: If more than this limit of cash is found in the house then the Income Tax Department will take action...

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Since Covid, the trend of digital transactions has increased a lot. But even now many people prefer to do transactions in cash. That is why many people withdraw the entire month's expenses from the ATM in one go and many women still use their cupboards instead of banks for their savings. But do you know what is the Income Tax rule regarding keeping cash at home? Let us know about that today.

How much cash can you keep at home?
First of all, let us tell you that you can keep as much cash as you want in your house. There is no restriction or ban on this. But now this question must be arising in your mind does the Income Tax Department send a notice for keeping more than a limit of cash at home? The answer to this question is no. But if a person comes under the scrutiny of the Income Tax Department, then he will have to tell what is the source of the money present in the house.

It is mandatory to show valid source documents of deposited money
According to the Income Tax rules, if you have a valid source of deposited money at home, then you have to show its documents. That is, if the money is not earned through the wrong means, then you do not need to panic at all. You just need to have complete documents to show where that money has come from.

Problems can arise if you are not able to give the correct account of the cash kept at home, then the investigating agency can impose a heavy fine on you. Let us tell you that according to the Income Tax rules since demonetization, if undisclosed cash is found with you during the investigation, then up to 137% tax can be imposed on the amount of cash recovered from you.

Deposited money can be confiscated for tax evasion
Government agencies Income Tax Department, Central Board of Direct Taxes or CBDT and Enforcement Directorate i.e. ED keep an eye on such people who have deposited black money. In such a case, if the account of cash deposited with the person is properly done in the ITR, then that cash cannot be confiscated.

But if something is found wrong or that person does not pay tax or is evading tax, then under section 132 of Income Tax, these agencies can raid and confiscate the huge amount of cash recovered from his house.

Other important things related to cash
According to the rules, you will have to show a PAN card if you withdraw or deposit more than Rs 50,000 from the bank at one time. You cannot make payments of more than 2 lakh in cash while shopping. If you shop for more than Rs 2 lakh in cash, then you will have to give a copy of your PAN and Aadhar card.

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