Delhi judge's cash allegations raise legal cash limits

Recent allegations have surfaced regarding unaccounted cash found at the home of Delhi High Court Justice Yashwant Varma. He has denied these claims, calling them a “conspiracy,” and has been removed from his duties at the court. This controversy has sparked public interest in how much cash individuals can legally keep at home in India. According to reports, there is no specific limit to the amount of cash one can hold, as long as the money is from legal sources and is reported in tax returns. However, if an individual cannot prove the legitimacy of their cash, they may face serious consequences. Tax authorities can confiscate the funds and impose fines of up to 137% of the amount in question. Experts recommend keeping detailed documentation for any cash on hand. This includes receipts and transaction records, and they advise against cash transactions whenever possible. Rules also restrict cash loans or deposits to amounts under Rs 20,000. For larger transactions involving cash or deposits above Rs 50,000, individuals must provide a PAN number. If someone deposits Rs 20 lakh in cash in a year, both a PAN and Aadhaar are required. Transactions involving cash over Rs 30 lakh may attract scrutiny, as can large credit card purchases exceeding Rs 1 lakh. Tax expert Naveen Wadhwa explained that while there is no defined limit on cash, individuals must be prepared to explain any significant sums. Failure to do so may result in the cash being deemed "unexplained income," subject to heavy taxation. Furthermore, non-business individuals must also justify the source of their cash. Gifts or property transactions exceeding Rs 2 lakh are subject to tax restrictions and penalties if violated.