In India, many individuals prefer storing their money at home, even large sums, rather than depositing it in banks. However, are you aware that there are income tax rules applicable to cash kept at home? Let’s delve into these rules to ensure you face no issues.
Income Tax Rules for Keeping Cash at Home:
Under the Indian Income Tax Act, there’s no restriction on keeping money at home. Yet, for income tax authorities, it becomes crucial to know the source and reason for storing such cash. Here are some key rules:
1. Restriction on Accepting Cash Over ₹20,000:
It’s not permitted for an individual to accept cash over ₹20,000, a rule that also applies to the transfer of immovable property.
2. Penalty on Cash Transactions Over ₹20 Lakh:
There can be penalties for cash transactions exceeding ₹20 lakh in a financial year if the source and accounting of such transactions are not clarified.
3. PAN Number Requirement for Payments Over ₹50,000:
While making a payment exceeding ₹50,000 at a time, it’s mandatory to provide PAN details.
4. PAN and Aadhaar Requirement for Depositing Over ₹20 Lakh Cash:
If an individual deposits more than ₹20 lakh cash in a year, they must provide their PAN and Aadhaar information.
5. Scrutiny on Property Sale and Purchase Over ₹30 Lakh:
If a property is sold or purchased using cash over ₹30 lakh, the individual could be subject to investigations by regulatory agencies.
InShortForYou:
While storing money at home is a common practice in India, being aware of the income tax rules associated with it is crucial. These regulations are designed to monitor large cash transactions and ensure they are legally accounted for. By adhering to these rules, individuals can avoid potential issues with tax authorities and ensure their financial practices are transparent and compliant.