How much cash can you keep at home? Income Tax rules and penalty details

Learn about the income tax rules for keeping cash at home, potential penalties for not disclosing the source, and details on cash transactions, bank withdrawals, and TDS regulations.

Keeping Cash at Home is Not a Crime

Keeping cash at home is not illegal, but when it comes to tax rules, a little carelessness can get you into big trouble.

No Limit, but Source is Important

Whether you have ₹10 lakh or ₹1 crore at home, if you cannot disclose its source, the Income Tax Department may consider it 'undisclosed income'.

What Happens if Cash is Found in an Income Tax Raid?

News often reports large cash seizures during raids on bureaucrats, politicians, and businessmen. Unrecorded cash can lead to confiscation, heavy fines, and even arrest.

Rules for Cash Deposits/Withdrawals Over ₹50,000

Providing your PAN number is mandatory for cash deposits or withdrawals exceeding ₹50,000 at a time.

Section 194N – TDS on Large Cash Withdrawals

If you haven't filed ITR for the past 3 years and withdraw over ₹20 lakh, 2% TDS applies. For withdrawals above ₹1 crore, it's 5%. For ITR filers, the limit is ₹1 crore.

Undisclosed Cash Means Trouble

The Income Tax Department considers cash without a source as undisclosed income, subject to penalties, taxes, TDS, and investigation.

Keeping Cash? Remember These 3 Things

Always keep proof of source (Salary, Business, Property Sale, etc.). Save bank statements and transaction details. File ITR returns on time.