In India, people keep a lot of cash in their homes. It is an old practice here to do so. There is no specific rule preventing you from keeping cash at home. However, if some things are not taken care of, then trouble can arise for you. Let’s know about it in detail.
Keeping cash at home for any emergency is a very old practice in India. Even though banks provide many types of offers and facilities to their customers, but even today people give more importance to keeping money at home for any sudden situation. However, is there any limit on how much money can be kept at home? Do you have to inform the Income Tax Department about the cash lying in the house after a certain amount? The answer is no.
You can keep as much cash at home as you want and there is no legal compulsion to give its information to any authority. However, whatever cash is kept with you, you should have information about the legally valid source and related documents.
That is, from where did you get that money, you must keep the documents related to it with you. If someone has a large amount of cash in the house and the Income Tax Department raids that house, the officials will demand these documents.
Tax paid
If the cash kept in your house comes under the ambit of tax, then tax should have been paid on it. If someone does not have all the documents related to sources and taxes paid, then he can be in big trouble.
If this happens, not only the Income Tax Department but also ED and CBI can question you. However, if you have the right documents then you have nothing to worry about.
If you were asked the source of cash in the Income Tax department raid and you could not show the correct documents or found some discrepancy in the documents, then you can be fined. This fine will be very heavy.
According to the Income Tax Act, you will have to pay 137 percent of the amount of cash found in your house as penalty. This means that the amount of cash you have with you will definitely go, on top of that you will have to pay 37 percent more.
