22 June 2011 There is no limit for holding cash in hand but the difficulties where there is cash in hand and you are still withdrawing cash from the bank which indicates that the cash in hand is bogus. Moreover, if you have taken loan from either Bank or through the private lenders then also there might come the problem of holding cash in had. The assessing officer might disallow the interest on your holding of the cash. At that time up to your capital he cannot do anything but if it exceeds the capital then he can add the interest as your income. Moreover against your capital the other assets shall be deducted and then the cash available shall be calculated.

Hence, take care for all the above aspects while keeping cash in hand of higher value or amount.

As regards wealth tax is concerned it is for payment of tax on wealth and a limit has been prescribed that if you hold more than this limit you have to pay the Wealth Tax but for Income Tax there is no section which directs you to hold cash up to any limit but the expenses claimed can be disallowed as indicated above.

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Querist : Anonymous

Querist : Anonymous (Querist)

22 June 2011 Thanks a lot sir, for your valuable suggestion

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