The cash withdrawal and deposit system in India is going to change from tomorrow i.e. 26th May. The Center has now made it mandatory for citizens to quote their PAN (permanent account number) or Aadhaar number, to withdraw or deposit money. more than Rs 20 lakh from bank accounts, including cooperative banks and post offices, in a financial year. These rules will also apply when opening a current account, the Central Council for Direct Taxes said in a notification earlier this month.
“Each person shall, when entering into a transaction specified in column (2) of the table below, cite his permanent account number or Aadhaar number, as the case may be, in the documents relating to such transaction, and any person specified in column (3) of said table, who receives this document, ensures that said number has been duly quoted and authenticated,” the CBDT said in its May 10 notice.
Columns 2 and 3 mention where the rules will apply and how people who receive these PAN and Aadhaar numbers should ensure that they are authenticated.
Previously, the PAN card was only required when depositing cash exceeding Rs 50,000 in a single day, but no annual cash deposit or withdrawal limit was covered under Rule 114 B. apart from that, the limit was only applicable to deposits made in banks. .
“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 the Director General of Income Tax Revenue (Systems) or to the person authorized 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,” the Center’s notification further states.
“Section 139A specifies the persons or transactions that must request and cite the PAN. However, since it could not cover all categories of people and operations, it delegated this responsibility to the central government. CBDT can therefore prescribe these transactions and these people. The CBDT, through this circular, has therefore prescribed transactions of cash deposits and cash withdrawals of more than Rs. 20 lakhs through a bank or post office and opening of the current account or credit account in cash as transactions specified to request PAN,” said Sujit Bangar, founder of Taxbuddy.com
“Persons entering into such transactions should apply for the PAN at least 7 days before they intend to undertake such transactions. If a person who already has a PAN is required to quote his PAN during such deposit transactions /cash withdrawals over Rs.20 lakhs and opening a checking account or cash credit account,” Bangar added.
The new withdrawal and deposit rules aim to reduce financial fraud, as the income tax department will be able to monitor high-value cash transactions. It will also help track money movements, experts say.
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