Widespread talks have resulted from the unexplained money found at Justice Yashwant Varma’s home, a Delhi High Court judge. The Delhi High Court has derostered Varma among the controversy surrounding while he has ridiculed the event as a “conspiracy. ”
This occurrence makes many question: just how much money is one legally allowed to have at home? Cash has no legal limit, but documentation is vital.
As per the Financial Express, there is no particular legal limit to how much a person can store at home. The cash, though, have to come from an honest source and have to be reported in Income Tax (IT) returns. News18 claims that a person could be subject to harsh consequences if they cannot show the origin of their cash. IT officers in such instances can confiscate the cash and levy penalties as much as 137 percent of the whole.
Professionals suggest keeping good records—including receipts, withdrawal slips, and transaction records—as well as limiting too many cash dealings.
Limits on cash deposits and transactions
Property Deals and Loans
For a loan or deposit, cash will not be accepted above ₹20,000 from a person.
Restrictions on Cash Transactions and Deposits
Loans and Property Deals
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A person cannot accept more than ₹20,000 in cash for a loan or deposit.
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The same limit applies to immovable property transactions.
Bank Transactions
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For deposits or withdrawals exceeding ₹50,000, a PAN number is required.
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If a person deposits ₹20 lakh or more in cash in a financial year, both PAN and Aadhaar must be provided.
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Buying or selling assets worth over ₹30 lakh in cash can trigger an inquiry.
Credit Card Payments
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A credit card transaction of over ₹1 lakh in cash can also invite scrutiny from authorities.
Authorities could also investigate a cash transaction of more than ₹1 lakh via credit card. Experts advise against having undisclosed money holdings
Vice President of Taxmann CA Naveen Wadhwa told Financial Express that though the Income Tax Act does not state a maximum cash limit, people should verify their money is from legal sources.
The Income Tax Act contains clear requirements for unexplained income spelled out in Sections 68 to 69B. “Wadhwa added that should one have a large amount of money, tax officials could start an investigation into the source of the funds, thereby requiring a full explanation from the individual. He also cautioned that unexplained income could result in a 78% tax plus more fines.
For businesses especially, tax and investment specialist Balwant Jain stressed the need of keeping good records. “Even non-business individuals have to account for the origin of such money,” he said. “… cash removed from the bank or cash receipts from other origins, including presents received by you.”
Under tax laws, Jain moreover observed that getting more than ₹2 lakh in cash for property or presents sales is illegal. Not following can incur a fine equal to the transaction sum.
There is no defined limit on how much money you may keep at home, but government keeps a close eye on significant cash balances, unaccounted for deposits, and high-value transactions. To circumvent fines and legal examination, one absolutely needs correct paperwork.
