Income Tax rules, penalties, and safe practices for cash holdings

With India moving swiftly towards digital payments, the Income Tax Department continues to recover large sums of cash during raids, raising an important question: How much cash can you legally keep at home?

No Fixed Limit on Cash at Home

The Income Tax Department has on how much cash an individual can keep at home. Whether small or large, storing cash is not illegal — as long as it comes from a such as salary, business earnings, or legal transactions.

The real problem arises when you cannot explain the source of your cash. In such cases, tax authorities treat it as .

What the Income Tax Act Says

The following provisions govern unexplained cash:

Section 68 : If an amount is found in your books/passbook without

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