These days, many people keep cash at home thinking it will make life easier. But the government has tightened control over cash.
If the cash you keep at home doesn’t match your income or you can’t explain it, the Income Tax Department can impose heavy penalties.
Investment banker and CA Sarthak Ahuja recently explained how these rules work and what people need to keep in mind.
If you hold large amounts of cash at home, understanding these rules is crucial to avoid huge losses. Let’s break it down.
How Is the 84% Tax Levied?
CA Sarthak Ahuja explains that if the Income Tax Department seizes cash at your home without a valid reason or proof, the total tax and penalty can reach approximately 84%. This includes various surcharges, cesses, and penalties.
For example, if Rs 10 lakh in cash is found without explanation, the tax and penalty could be around Rs 8.4 lakh.
The government is now closely monitoring all major cash transactions. If anything suspicious is found, the department can conduct searches and seizures.
How the Income Tax Department Tracks Cash
Many people wonder, “How would anyone know if I keep cash at home?” Today, banks and digital payment systems regularly share transaction information with the department:
If you withdraw more than Rs 10 lakh in a year from your savings account, the bank reports it to the Income Tax Department.
If you withdraw more than Rs 20 lakh in cash, the bank deducts TDS (tax) automatically.
Any suspicious transaction can trigger a direct search or investigation.
This means all cash transactions are recorded and monitored by the government.
Heavy Penalties on Cash Transactions
Cash in Property Deals
Accepting cash in property transactions is risky.
Taking more than Rs 20,000 in cash while selling property can attract a 100% penalty on that amount.
Taking more than Rs 2 lakh in cash from a single customer in a day also results in a 100% penalty.
Cash Loans from Friends or Family
Borrowing money in cash from friends or relatives is illegal. Any cash loan may attract a 100% penalty. Always use a bank transfer or digital payment for loans.
Government Surveillance Is Stronger Than Ever
CA Sarthak Ahuja warns that the government’s monitoring systems are now highly advanced. Banks, payment apps, and other financial institutions continuously share data.
If your cash transactions don’t match your income, the authorities can take action anytime.
Sarthak Ahuja emphasizes:
“The government has so much information today that it can track anyone through their transactions, so be very careful.”
