From now on, PAN, Aadhaar owes if cash withdrawals and deposits exceed Rs 20 lakh in any given year

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NEW DELHI: The government has made it mandatory to quote PAN or Aadhaar number if cash deposits and withdrawals in a financial year exceed Rs 20 lakh and in case of opening a checking or credit account in cash at a bank. The Central Commission for Direct Taxes (CBDT) issued a notification on May 10, 2022 to this effect. The new rules will come into effect from May 26, 2022.
According to the new rules, providing PAN or Aadhaar will be mandatory in the following transactions:
Cash deposit or deposits totaling Rs 20 lakh or more during a financial year, in one or more accounts of a person with a banking company or a cooperative bank or a post office;
Cash withdrawal or withdrawals totaling Rs 20 lakh or more during a financial year, from one or more accounts of a person at a bank, cooperative bank or post office
Opening of a checking or cash credit account by a person at a bank, cooperative bank or post office
The permanent account number or Aadhaar number along with demographic information or biometric information of an individual should be submitted to the Senior Director General of Income Tax (Systems) or Director General of Income Tax (systems) or to the person authorized by the Principal Director. General of Income Tax (Systems) or General Manager of Income Tax (Systems) with the approval of the Board, for the authentication purposes referred to in Section 139A.
Point to note: The limit of Rs 20 lakh is for deposits as well as withdrawals, which implies that there is a separate limit of Rs 20 lakh for deposits and a separate limit of Rs 20 lakh for withdrawals. If a person has more than one account with a bank, deposits or withdrawals from each of these accounts will be taken into consideration when calculating the limit of Rs 20 lakh.
A person must request the allocation of PAN at least seven days before the date on which he intends to enter into such a transaction.
The government wants to put a check on unrecorded financial transactions through cash. Once a person cites the PAN, it will be easier for tax authorities to track high value transactions.
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