The government has made quoting of PAN or Aadhaar number mandatory if the cash deposits and withdrawals in a financial year exceeds Rs 20 lakh and in case of opening of current account or cash credit account with a bank. The Central Board of Direct Taxes (CBDT) has issued a notification on May 10, 2022 for the same. The new rules will be effective from May 26, 2022.
As per the notification, “Every person shall, at the time of entering into a transaction specified in column (2) of the Table below, quote his permanent account number or Aadhaar number, as the case may be, in documents pertaining to such transaction, and every person specified in column (3) of the said Table, who receives such document, shall ensure that the said number has been duly quoted and authenticated.”
The notification further states, “The permanent account number or Aadhaar number along with 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.”
Rahul Charkha, Partner, Economic Laws Practice says, “Prior to this notification, a bank official was required to ensure that individual undertaking such transactions have PAN. However, going forward, a bank official will be required to keep the PAN in bank’s records and inform the same to the Income tax department regarding such financial transactions. Further, new rules will be applicable not only to banks but also to post offices and co-operative society.”
Charkha further adds, “The newly inserted rules may be seen as a step the government towards spreading its arms in tracking the cash deposits/withdrawals to combat the circulation of cash in the economy. With Annual Information Statement (AIS) and TDS under section 194 N already in place, it will be easier for government to bring all information regarding cash deposits/withdrawals by a person in one place and track such transactions irrespective of whether if TDS is applicable or not.”
As per the notification, every person to obtain and quote Permanent Account Number (“PAN”), wherein he enters into any of the following transactions:
. Cash deposits aggregating to Rs 20 lakhs or more in the financial year in one or more accounts with a bank or a post office.
. Cash withdrawal or withdrawal aggregating to Rs 20 lakhs or more in the financial year in one or more accounts with a bank or a post office.
. Opening of current account or cash credit account with a bank
Aakanksha Goel, Direct Tax Partner, T R Chadha & Co LLP says, “Earlier, as per Rule 114B, PAN was mandatorily required to be quoted in case of cash deposit exceeding Rs 50,000 in a single day, however, no annual aggregate limit for cash deposition was prescribed. Also, no limit was prescribed for cash withdrawal, which has also been prescribed now.”
She further adds, “The said Rules shall be applicable from May 26, 2022, and hence every person who intends to undertake afore-stated transactions should obtain the PAN, otherwise, such person would not be able to perform afore-stated transactions. Since the rules are applicable from May 26, 2022, CBDT may need to clarify whether the transactions are undertaken prior to May 26, 2022, shall be considered for computing the aggregate value of INR 20 lakhs for this financial year or not.”
Source By : economictimes