In the wake of Income Tax raids uncovering a substantial Rs 351 crore in cash at the premises of Congress MP Dhiraj Prasad Sahu, questions have arisen about the permissible limits of cash holdings at home and the implications of the latest Income Tax rules.Dhiraj Prasad Sahus ResponseIn response to the staggering cash discovery, Dhiraj Prasad Sahu, a Congress MP, clarified that the funds were derived from his familys liquor business, vehemently denying any political affiliations. Speaking with the news agency ANI, Sahu expressed dismay, stating that this incident, occurring in his 30-35 years of political career, was unprecedented. He admitted that the recovered money belonged to his liquor firm, emphasising its association with the sale of liquor.Income Tax Rules on Cash HoldingsAccording to the Income Tax Act, there is no specific restriction on the amount of money one can store at home. However, during an income tax raid, individuals must substantiate the source of the money. Unaccounted funds can lead to penalties, with income tax officials authorised to seize unexplained money and impose fines of up to 137% of the total amount.Crucial Cash Rules to RememberNo Acceptance of Rs 20,000 or More in Cash for Loans or Deposits: The income tax department strictly prohibits accepting Rs 20,000 or more in cash for loans or deposits.PAN Numbers Mandatory for Transactions Above Rs 50,000: Individuals must provide PAN numbers for deposits or withdrawals exceeding Rs 50,000 at a time, according to the Central Board of Direct Taxation.Scrutiny of Cash-Based Asset Transactions Above Rs 30 Lakh: Engaging in the purchase or sale of assets via cash exceeding Rs 30 lakh may attract scrutiny from investigating agencies.Investigation Into Credit-Debit Card Transactions Above Rs 1 Lakh: Transactions exceeding one lakh rupees through credit or debit cards at a time may trigger investigations.2% TDS on Withdrawals Exceeding 1 Crore: Individuals withdrawing more than Rs 1 crore in cash from the bank in a year are liable to pay a 2% TDS.Fine for Cash Transactions Over 20 Lakhs: Cash transactions surpassing 20 lakhs in a year may attract penalties, while the purchase and sale of cash property over 30 lakhs can prompt investigations.Caps on Cash Payments: Limits include not paying more than 2 lakh in cash for purchases without PAN and Aadhaar details, and restrictions on transactions above Rs 1 lakh with credit-debit cards.Family Transactions and Loans: Receiving more than Rs 2 lakh in cash from a relative in a day or taking a loan above Rs 20,000 in cash from anyone else is prohibited.Understanding these rules is crucial to avoiding legal repercussions and ensuring compliance with income tax regulations.
