New Delhi: The Income Tax Department keeps a close eye on your income. If a large amount is transferred into your account, the Income Tax Department sends a notice to obtain information about it. Furthermore, the rules regarding keeping cash at home have also been tightened. The government has significantly tightened the Income Tax rules.

If you keep cash at home that is not properly disclosed, you could face up to 84% tax and penalties. Banks also report cash withdrawals to the Income Tax Department. Don’t assume that cash kept at home is safe, and the Income Tax Department will not be aware of it. You need to be cautious, as banks can also report this information to the Income Tax Department. In any case, banks report large cash withdrawals to the Income Tax Department.

Read More: How to Save Money on a Rs 30,000 Monthly Salary, Know the Smart Formula

Banks Report to Income Tax

You may be surprised to know that if you withdraw more than ₹10 lakh from your account every year, the bank reports this information to the Income Tax Department. Most importantly, if the withdrawal exceeds ₹20 lakh, the bank also deducts TDS. This doesn’t mean you’ve done anything wrong. However, the department will monitor the purpose for which the money was used.

Read More: Get Life Insurance Worth Rs 50 Lakh from The Post Office, Learn The Full Details

Whether you’ve spent more than your income or kept cash in cash? In some cases, the government imposes a 100% penalty on cash transactions. The penalty is based on the amount of cash given or taken. Anyone selling a party’s sale deed for more than ₹20,000 in cash is subject to a fine.

Any cash expenditure, regardless of the amount, is also punishable by cash sales of more than ₹200,000 from a single customer. A shop or business accepting more than ₹200,000 in cash from a single customer can face a 100% penalty.

Civil concern increases

For information, many people on social media have expressed their concern about this strictness. Some users said that the income of ordinary citizens is increasing, while action against high-profile individuals is decreasing. On the other hand, a user wrote that withdrawing 10 lakh rupees isn’t a big deal these days. Some people also questioned whether money withdrawn from the bank is already legal. So why the legal hassles of keeping it at home?

Don’t be afraid if you have a complete record.

If you have a complete record, there’s no need to be afraid. This record includes bank statements, proof of income, old bills, important receipts, and accounts of digital payments. Most people are already using digital payments as a medium. This automatically creates a record of transactions and also simplifies the process of responding later.