How much money can a person legally keep in their home..!?
India has some restrictions on keeping cash at home no matter how many crores you earn. Billionaires like mukesh Ambani, gautam adani, and ratan tata are not exempted from this. One might have heard various news about income tax authorities raiding and confiscating large amounts of unaccounted cash from their homes or offices. In this regard, cases are filed against the concerned persons, and arrests are also made. In this situation, the question arises in the mind of many how much cash can one keep in his house in India? According to income tax experts, there is no provision in the Income Tax Act on this aspect. One can keep as much money as he wants in his house if it is generated from one source and recorded in ITR and books of account.
Taxmann Vice President naveen Wadhwa said that the Income Tax Act does not define the permissible amount of money that an individual can keep at home. Individuals can have a reasonable amount of money in their financial records as evidenced by properly documented sources. The Income Tax Act contains express provisions on unexplained income outlined in Sections 68 to 69B. If an individual has a substantial sum of money, the tax authorities can initiate an inquiry into the source of the funds, provided a detailed explanation is provided by the individual. These rules empower the Assessing Officer to seek an explanation from the assessee if an unaccounted asset is discovered or an asset is discovered but not adequately recorded in the books of account. Failure to provide a satisfactory explanation of the nature and source of such funds may treat the money as unexplained income. In such cases, the unaccounted income may attract tax at the rate of 78% with penalty, says Wadhwa. Balwant Jain, a tax and investment expert, says that neither the tax laws nor the Reserve bank of India's regulations limit the amount of money you can hold. However, there are a few things you should keep in mind. For example, if you are running a business, it should match the ledger that is maintained. Even non-business people must explain the source of such money. This can be money withdrawn from the bank or money from other sources including gifts you have received. If you say that cash represents a gift or property transaction, then for each gift or property transaction. Jain said there are restrictions in the tax law for getting more than 2 lakhs.