In today’s digital world, where people are doing everything online, from electricity bills to mobile recharges, the habit of keeping cash at home has not ended. Many people consider it a safe option for emergencies or sudden expenses. But when it comes to keeping a large amount of money, a question arises in people’s minds, Is there any limit on keeping cash at home? Does the Income Tax Department make any rules on this? In this article, we will give you all the information related to this important topic, so that you can avoid any kind of legal trouble.
Is there any limit on keeping cash at home
According to the Income Tax Department, there is no legal restriction on how much cash can be kept at home. This means that you can keep as much cash as you want according to your convenience. However, it is extremely important that this money is part of legitimate income and its source, i.e., where this money came from, should be clear.
Why is proof of source necessary
Even though there is no fixed limit for keeping cash, the Income Tax Department does look at where the money came from. If you are unable to provide proof of this, it can be considered undeclared income. Therefore, whether it is your salary, business income, or money received from selling property, it is extremely important to keep a record of every source of income safely.
Importance of ITR and documents
If the cash you have is shown in your Income Tax Return (ITR), then you can easily answer any kind of inquiry. Similarly, it is also important to keep the receipt or agreement of the amount received on selling the property safe. The right documents not only save you from legal troubles but also prove your financial position to be strong.
What can be the harm if there is no proof
If the Income Tax Department finds cash in your house and you are unable to tell its source, then you may face a heavy fine or legal action. In many cases, there is a provision of a fine as well as a jail sentence for undeclared income. Therefore, it is not wrong to keep cash, but it is very important to prove its accountability. Always keep track of your transactions and keep the correct documents safe.