There is no statutory upper limit on how much Indian currency a resident can keep at home. What matters is that you can prove the legitimate source of the cash and that you haven’t broken India’s strict caps on cash receipts, loans, spending and withdrawals. If you can’t explain the source, the taxman can treat it as “unexplained money” and hit it with a punishing tax bill.
What the law actually says
India’s Income-tax Act doesn’t fix a rupee ceiling on personal cash holdings. But cash found without credible explanation can be taxed as unexplained money (Section 69A); such income is charged at a special rate under Section 115BBE—60% tax plus surcharge and cess (effective ~78%). That’s before any separate penalties/interest. Keep records.
The real limits you must obey (or risk penalties)
₹2,00,000 receipt cap (Section 269ST). You cannot receive ₹2 lakh or more in cash: (a) from a person in a day; or(b) against one transaction; or (c) for transactions relating to one event/occasion. Violation draws a penalty equal to the amount (Section 271DA). Use banking channels instead.
₹20,000 cap on cash loans/deposits (Section 269SS). Loans, deposits or specified sums of ₹20,000 or more must not be accepted in cash; breach triggers penalty equal to the amount (Section 271D).
Business spending limit ₹10,000 (Section 40A(3)). If you run a business/profession, any cash payment over ₹10,000 in a day to a person (₹35,000 for goods carriage) is disallowed as an expense, hiking your taxable profits.
TDS on large cash withdrawals (Section 194N). Banks must deduct TDS on big cash withdrawals: normally 2% above ₹1 crore in a financial year. For those who haven’t filed returns in the prescribed period, the threshold drops to ₹20 lakh (2% between ₹20 lakh–₹1 crore, 5% above ₹1 crore).
PAN needed for big cash deposits. Banks must insist on PAN for cash deposits over ₹50,000 in a day (or Form 60 if eligible). Expect scrutiny without it.
High-value cash deposits get reported (SFT). Banks/post offices report cash deposits aggregating to ₹10 lakh or more in a year in savings/postal accounts to the Income Tax Department under Rule 114E (Form 61A). Such hits show up in AIS/26AS.
Cash gifts can be taxable. If you receive gifts in cash totalling over ₹50,000 in a year from non-relatives, the entire amount becomes taxable (Section 56(2)(x)); gifts from specified “relatives” and on the occasion of marriage are exempt. Keep a paper trail (gift deed/occasion notes).
Practical takeaways if you keep cash at home
Document the source: ATM/bank counter slips, salary withdrawal entries, sale invoices, loan agreements, gift deeds—anything that ties the cash to a traceable, tax-paid origin. This is your defence against Section 69A.
Don’t split to dodge rules: Breaking one ₹2 lakh payment into multiple smaller cash payments connected to one transaction/event can still violate 269ST. Use digital/cheque where possible.
Mind currency status: ₹2,000 notes were withdrawn from circulation but remain legal tender; exchanges continue at RBI Issue Offices. Hoarding withdrawn notes doesn’t by itself make cash illegal—but it can raise questions if the source is murky.
Bottom line
You can legally keep any amount of cash at home in India. The risk isn’t the stash—it’s the story: if you can’t show a clean, documented trail and you breach the ₹2 lakh receipt, ₹20,000 loan/deposit, ₹10,000 business spend, PAN, TDSor SFT rules, expect heavy tax, penalties and scrutiny.
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