Income Tax: If so much cash is found in home and office then Income Tax department will take action, know what is the limit..

Cash Limit Rules: The income tax department keeps a close watch on every digital and cash transaction done by people. Especially if money is transferred from one place to another in cash (cash transaction rules), then the department takes immediate action in such cases.

Many rules have also been made by the Income Tax Department while fixing the limit of keeping cash at home or office (cash limit at office). If you also keep cash at home or office, then you must know these rules.

Limit of keeping cash at home and office-

There is no limit on keeping cash at home (cash limit in the home). If you have a known source of income and there is proof of it, then you can keep as much cash as you want at home. You should show this money in ITR (income tax return).

If you do not have a source of income, then action will be taken to keep more cash than the limit at home or office (cash transaction rules). The department can also impose a fine on you by confiscating this cash. If the cash matches your source of income correctly, you can avoid action.

Pay tax on taxable income-

If your annual income is taxable, then pay tax on it. After this, you can avoid action by the department and you will not face any problem even if you keep cash at home. Known sources of income will protect you as proof. If there is no known source of income, then action can be taken if more than the limit cash is found in the house or office (cash limit rules).

The department can check the property-

The Income Tax Department (IT rules on cash) can check the details of any property. If the department (IT department) demands to provide documents regarding the cash kept at home, then you will have to show these. The department takes action if necessary after completing its investigation process.

Tax will be imposed if proof is not given-

Those who keep unaccounted cash at home (IT rules on cash limit) need to keep proof and a known source of this cash. In the absence of this, action can be taken against you. If you do not provide proof during the Income Tax Department's investigation, the department (Income Tax rules on cash limit) can take action against you. Tax and penalty can be levied on this cash. This penalty is usually 78 percent of the cash amount.

Keep complete account of transactions-

You can keep as much cash as you want in your home or office (IT rules for cash at home). However, some rules have also been set for this. Businessmen have to keep account of all types of transactions. For them, keeping a diary, file, bills, and account can work as proof.

Apart from this, keep all the account-related records safe. If you have taken cash (IT rules for cash at the office) by selling land or property, then you should keep proof of it. If you withdraw cash from the bank, keep the bank slip with you. If you take money from someone, then keep proof of that as well.

Rule of cash received as a gift-

If cash has come to you in any way, then you should keep proof of it with you. If you have received cash by selling land, withdrawing it from the bank (bank news), or selling jewelry, etc., then keep proof of it. If you have received cash as a gift (gifted cash rules), then keep in mind that action can be taken if you take more than two lakh rupees.

Keep these things in mind -

If your annual income comes under the purview of tax (income tax new rules), then it is necessary to pay tax. Many people hide their income and do not pay taxes. In such a situation, they keep cash in the house or office. These people can come on the radar of the Income Tax Department (IT department cash limit rules) at any time. The department can also raid, let us tell you that the Income Tax Department has the right to collect tax from those who do not pay tax (Tax rules on cash).

Disclaimer: This content has been sourced and edited from Hr Breaking. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.