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
- It is mandatory to quote PAN to file an income tax return or in order to initiate any correspondence with the income tax authorities.
- 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.
- Even when investing above Rs 50,000 in mutual funds, debentures or bonds, furnishing PAN details is mandatory.
- 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.
- 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.
- One also needs to mention the PAN at the time of selling or purchasing a motor vehicle or vehicle other than two wheelers.
- 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.
- 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.
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