PAN mandatory to deposit or
withdraw Rs 20 lakh, opening current account
With a view to curb evasion of taxes through the use of cash, the Central Board
of Indirect Taxes (CBDT) has notified amendments to the Income Tax Rules that
have made mention of PAN mandatory for those who make high deposits and
withdrawals over the cash counter.
The same would apply while opening a current account.
This rule is applicable to accounts which may already be linked to a PAN
number. New rules will be applicable from May 26.
New Income Tax Rules: PAN Mandatory
- The government said that the measure is in sync with the
policy to reduce the use of cash for transactions and the push for digital
modes.
- The CBDT notified amendments in the Income Tax Rules, 1962
prescribing new transactions for obtaining and quoting PAN.
- The notification says, “the term transactions include
deposit/withdrawal of cash amounting to Rs 20 lakh or more in a financial
year through one or more bank accounts. Account(s) with not just
commercial bank but even co-operative bank or post offices.”
- In the Budget for 2020, the Finance Ministry had introduced Tax
Deducted at Source (TDS) on cash withdrawal in excess of Rs 20 lakh and
this amendment to the rule has been added for specific transactions.
- With this, the government has put the onus of quoting the PAN and
Aadhar details at the time of initiating a transaction both on the
customer and financial institutions, which include a bank, co-operative
bank and a post office .
- Sources say that the government will also come out with SOPs for
the authentication of the PAN and Aadhaar.
- With this, there is yet another filter in place to ensure that
everyone who operates a bank account gets a PAN to make cash transactions
of Rs 20 lakh or more.
Interestingly, banks and other financial institutions now await a clarification from the government about how to deal with the rule in future as far as transactions made prior to May 26, 2022 deadline are concerned, since the financial year started in April.
The notification applied the PAN rule to “cash deposit or
deposits aggregating to twenty lakh rupees or more in a financial year, in one
or more account of a person with a banking company or a co-operative bank to
which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank
or banking institution referred to in section 51 of that Act) or a Post Office.
It’s similarly applicable to “cash withdrawal or
withdrawals aggregating to twenty lakh rupees or more in a financial year, in
one or more account of a person with a banking company or a co-operative bank
to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any
bank or banking institution referred to in section 51 of that Act) or a Post
Office.”
The CBDT has prescribed that under the new
rule the permanent account number or Aadhaar number alongwith demographic
information or biometric information of an individual shall be submitted to the
Principal Director General of Income-tax (Systems) or Director General of
Income-tax (Systems) or the person authorised by the Principal Director General
of Income-tax (Systems) or Director General of Income-tax (Systems) with the
approval of the Board, for the purposes of authentication referred to in
section 139A.
0 Comments