From Today, PAN, Aadhaar Is Mandatory For Cash Transactions Above THIS Amount. Details Here

IT rules latest update: The cash withdrawal and deposit system in the country is set to undergo a major change from today, i.e. Thursday, May 26, as it will now be mandatory for citizens to quote their PAN card or Aadhaar card number for cash withdrawals/deposits amounting to Rs. 20 lakh or more in a single financial year.Also Read – PAN, Aadhaar Mandatory For Cash Withdrawals, Deposits in Banks From Tomorrow | Check Latest Rules Here

The fresh guideline will also be applicable for the opening of a current bank account or cash credit account by a person with a banking company or a co-operative bank or a post office. Additionally, a person is required to apply for PAN at least seven days before making any of the aforementioned transactions. Also Read – ITR Filing Latest Update: Income Tax Department Notifies New ITR Forms For FY 2021-22

The new rule was announced by the Central Board of Direct Taxes (CBDT) in a notification dated May 10. “The term transactions includes deposit/withdrawal of cash amounting to ₹20 lakh or more in a financial year through one or bank accounts. Account(s) not just with commercial bank, but even co-operative bank or post offices,” the notification read. Also Read – PAN-Aadhaar Linking: What Will Happen If You Miss The Deadline? 5 Key Things Taxpayers Must Know

According to reports, the main objective of the circular is to put a check on unaccounted financial transactions through the cash route.

PAN card also mandatory for several transactions

1. It is mandatory to quote PAN to file an income tax return or in order to initiate any correspondence with the income tax authorities.
2. Besides that, it is also compulsory to quote PAN in various other financial transactions. For instance, PAN is required to open a bank or demat account or avail a credit or debit card.
3. Even when investing above Rs 50,000 in mutual funds, debentures or bonds, furnishing PAN details is mandatory.
4. Similarly, payment of an amount aggregating to more than Rs 50,000 in a financial year as life insurance premium to an insurer also needs a PAN.
5. You also need to quote the PAN for deposits of cash exceeding Rs 50,000 during any one day or a time deposit (fixed deposit) of amount exceeding Rs 50,000 or aggregating to more than Rs 5 lakh during a financial year with a banking company or a co-operative bank, a post office or a non-banking financial company.
6. One also needs to mention the PAN at the time of selling or purchasing a motor vehicle or vehicle other than two wheelers.
7. It also has to be quoted during payment in cash of an amount exceeding Rs 50,000 to a hotel or restaurant or for travel to any foreign country or payment for purchase of any foreign currency at any one time.
8. In some of these transactions, the Aadhaar number can be quoted if the PAN is not available. However, not mentioning or providing PAN or Aadhaar wherever mandatory can lead to a notice and penalty.