There is no cap on how much cash you can retain at home under the Income Tax regulations. But:
• You need to be able to describe where the money came from.
• The money you own must be supported by the appropriate paperwork, such as an ITR statement.
• No matter how much money is generated, as long as it is properly stated, there is no need to be concerned.
During an inquiry, you might run into problems if you are unable to provide proof of the source of your funds:
• Investigation by Authorities: The legitimacy of the funds may be questioned by agencies.
• Your tax returns and payments will be examined by the Income Tax Department.
• Up to 137% of the money may be recouped in taxes and penalties if it turns out that the funds were not reported.
Withdrawals Over ₹50,000:
If you want to withdraw more than ₹50,000 in cash at once, you must provide your PAN card.
TDS for Significant Withdrawals:
TDS is due by Section 194N of the Income Tax Act if you withdraw:
Over ₹20 lakh annually: non-ITR filers (last 3 years) pay 2% TDS.
Over ₹1 crore annually: 2% TDS for ITR filers, 5% TDS for non-ITR taxpayers.
Without TDS, ITR filers are permitted to withdraw up to ₹1 crore each year.
Credit/Debit Card Cash Transactions:
An investigation may be prompted by transactions totaling more than ₹1 lakh at one time.
Purchasing Anything Over ₹2 Lakh:
Cash payments over ₹2 lakh are not allowed unless accompanied by both Aadhaar and a PAN.
If you want to withdraw more than ₹50,000 in cash at once, you must provide your PAN card.
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