New Delhi: The world is moving towards digitalisation and everything from shopping to payments is becoming online. Yet many people still keep cash at home and use it for transactions. We also come across the news of the Income Tax Department conducting raids and recovering huge amounts of cash. In such a situation its natural to wonder how much cash one can legally keep at home. Lets find out what the law says about this. Is there a limit on cash storage at home? The first important question is is there a legal limit on cash storage? Regarding this question the Income Tax Department has not set any limit on cash storage at home. Whether the amount is small or large keeping cash at home is not illegal. The only condition is that there must be some legitimate source of income. If you can prove that the money kept at home is your salary business income or part of a legal transaction you can safely keep any amount at home. Problems arise when you cant prove the source of the income. What does the Income Tax Act say? Sections 68 and 69B of the Income Tax Act outline the rules related to cash and property. Section 68: If an amount is recorded in your passbook or cashbook but you are unable to explain its source it will be considered unclaimed income. Section 69: If you have cash or investments but are unable to account for them it will be considered undisclosed income. Section 69B: If you have assets or cash in excess of your declared income but are unable to disclose their source you will be subject to tax and penalties. If you cant explain the source If a large amount of cash is recovered from your home during an investigation or raid and you are unable to provide a proper explanation the entire amount will be considered undisclosed income. In this situation you could be subject to a hefty tax a fine of up to 78% of the seized amount could be imposed and if the IT department suspects tax evasion a case may also be filed. HIGHLIGHTS How much cash can you keep at home as per the law? Many people keep cash at home and use it for transactions. The Income Tax Department conducts raids and recovers huge amounts of cash. Is there a legal limit on cash storage at home? The Income Tax Department has not set any limit on cash storage at home. Whether the amount is small or large keeping cash at home is not illegal. The only condition is that there must be some legitimate source of income. If you can prove that the money kept at home is your salary business income or part of a legal transaction you can safely keep any amount at home.