PAN or Aadhaar mandatory for yearly transactions of 20 lakhs or more from today; PAN also required for Current Account
The mechanism for withdrawing or depositing cash in India is changing as of today, May 26.
From now on, consumers must provide their PAN card or Aadhaar card number while withdrawing or depositing 20 lakh or more from bank accounts, including cooperative banks and post offices, in a financial year.
These rules will also apply when a current account is opened. Furthermore, a person must apply for a PAN card at least seven days before engaging in any of the aforementioned transactions.
The Central Board of Direct Taxes (CBDT) announced these rules in a notification dated May 10.
“The term transactions refers to cash deposits and withdrawals totaling 20 lakh or more in a financial year through one or more bank accounts.” “Account(s) not only with commercial banks, but also with cooperative banks or post offices,” according to the notification.
Previously, a PAN card number was required only when depositing more than 50,000 in a single day, but there was no yearly limit for cash deposit or withdrawal.
The following transactions are covered by the notification:
1) Cash deposits totaling 20 lakh or more in one or more accounts with a banking institution, a cooperative bank, or a post office in a financial year.
2) Cash withdrawals or withdrawals of 20 lakh or more from one or more accounts with a banking institution, a cooperative bank, or a post office in a financial year.
3) An individual opens a current account or a cash credit account with a banking business, cooperative bank, or post office.
“Every person shall, when 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 about 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,” according to the notification.
Meanwhile, the CBDT notification states that an individual’s PAN or Aadhaar, along with demographic or biographic information, must be submitted to the principal director general of Income Tax (Systems), or director general of Income Tax (Systems), or an official authorised by either, for the purpose of authentication as defined in section 139. (A).
The principal director general, director general, or an official authorised by either would set the format and conditions for PAN or Aadhaar authentication.
According to reports, the main purpose of the circular is to avoid inexplicable financial transactions through the cash route.
For Official Notification Download PDF Given Below: