- By Aditya Pratap Singh
- Thu, 24 Apr 2025 03:00 PM (IST)
- Source:JND
How much cash can I keep at home in India? In India, we often hear such news that highlights Income Tax raids where officials recover large amounts of unaccounted cash and valuables from homes of individuals or offices. These incidents naturally ignite questions in common citizens' minds, like whether it is illegal to keep cash at home. And how much cash is one legally allowed to keep? What are the income tax rules? etc.
Meanwhile, people hear a lot of misconceptions about the cash limit, and they believe these without checking them on reliable sources.
There is no legal limit on keeping cash at home
The amount of money you can keep at home is not restricted by law. No upper limit has been set by the Income Tax Department. But the most crucial requirement is that the funds come from a reliable source. You should include this information in your income tax returns (ITR) and be able to explain the source of the funds if questioned.
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It's Important to Identify the Source
The Income Tax Act's Sections 68 through 69B address assets and income that cannot be explained. The money that is discovered in your possession could be regarded as undisclosed income if you are unable to explain its origin. The tax authorities may levy a steep tax and penalty in these situations, up to 78% of the total.
Keep accurate records
Large sums of cash that cannot be explained can raise suspicions, even though the law does not specify a maximum limit for cash holding. Documentation proving the source of each rupee is required during an investigation. Your income records, business accounts, and ITR filings should reflect this.
Who Needs to Exercise Caution?
The cash in your cashbook and your account books must match if you are a business owner. Any sizable amount of money that an individual keeps at home should be supported by official documentation of their earnings or savings. This is crucial for maintaining transparency as well as avoiding legal issues.
In India, keeping cash at home is not against the law. However, accountability is crucial. You shouldn't be concerned as long as your money is earned honestly, declared correctly, and backed up by documentation. Your best defences are openness and accurate documentation.
