Cash Limit: Nowadays, most people do everything online, from paying electricity bills to mobile recharge. Despite this, the habit of keeping cash at home has not ended. People consider it safe for emergency or sudden expenses. But when it comes to keeping a large amount at home, many questions arise about the legal rules.
Is there a limit to keeping cash at home?
According to the Income Tax Department, keeping any amount of cash at home is completely legal. There is no fixed limit on this. That is, whether you keep thousands of rupees or lakhs of rupees, the law does not prohibit it. However, the condition is that this money has come from legitimate income, and its source can be clearly stated.
Why is it necessary to tell the source
Not having a limit on cash does not mean that any amount can be kept without accounting. The tax department always keeps an eye on where the money has come from. If you are unable to provide proof of this, then this amount comes under the category of undeclared income. In such a situation, the possibility of investigation and action increases.
Role of Income Tax Return and Documents
If the cash you have is recorded in your Income Tax Return (ITR), then any questions from the tax officials can be answered easily. The certificate or agreement of the amount received from selling property, business income, or any other source should always be kept safe. Documents not only prove your strong financial position but also provide legal protection.
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Danger of keeping cash without proof
If the tax department recovers cash from your house and you are unable to tell its source, then it can create a big problem. In such a situation, along with the penalty, legal action can also be taken. In many cases, a heavy penalty is imposed on undeclared income, and there is a provision for a jail sentence. Therefore, keeping cash at home is not wrong, but everyone needs to prove their accountability.