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If you have also kept a huge amount of cash, gold, jewelery or any kind of investment in your house and have not yet given information about it in the Income Tax Return (ITR), then this news is very important for you. If you do not find any valid legal proof of the source of income of this property you have, then you need to be a little careful. The Income Tax Department directly considers such cases as ‘Unaccounted Income’ and levies huge tax and penalty on it ranging from 78 percent to 86 percent.

Understand the complete mathematics of tax and penalty here

In fact, under Section 115BBE of the Income Tax Act, there is a provision for very stringent financial penalty on undisclosed assets or unaccounted cash. Whenever a citizen is caught with such undisclosed income, first of all he is directly taxed at the rate of 60 percent. The game does not end here, on top of this tax a heavy surcharge of 25 percent and cess of 4 percent is also added. By combining all these, the total tax liability directly reaches 78 percent.

Apart from this, if you are completely unable to provide the correct source or source of your income during investigation, then the Income Tax Department also imposes an additional penalty of 10 percent under Section 271AAC. In this way, the overall recovery done by the government reaches about 86 percent, due to which a large part of your hard-earned money goes in fines.

Know what are the legal rules for keeping cash and gold at home

Many people have a question in their mind that how much cash or gold is it legal to keep at home. Let us tell you that by law there is no maximum limit for keeping cash at home, provided that money should be a part of your legal and tax-paid income. Also, it is important to have the complete account of that money recorded in your account books.

If we talk about gold and jewellery, then in view of Indian culture and traditions, special permission has been given in the law to keep a certain amount of gold even without disclosing the source. According to government rules, a married woman can keep up to 500 grams of gold jewelery and an unmarried woman can keep up to 250 grams of gold jewelery in her house without any income proof. Apart from this, male members of the family are also allowed to keep gold up to 100 grams. If your jewelery is within this limit, it will never be confiscated even during a raid by the Income Tax Department.

This is an easy way to avoid heavy fines and punitive action.

If for any reason you have fallen into the trap of tax evasion or have forgotten to give information about your assets, then the Government of India has given an excellent option to fill ‘Updated ITR’ to avoid this. If a citizen receives a Reassessment Notice from the Income Tax Department, and even after that he declares his correct and actual income, then he can easily avoid huge punitive action from the government and heavy court cases. Therefore, it is wise to give correct details of your property in time.