According to the notification, “Any person shall, when entering into a transaction specified in column (2) of the table below, cite his permanent account number or his Aadhaar number, as the case may be, in the documents relating to this transaction. , and any person listed in column (3) of said table, who receives such document, must ensure that said number has been duly quoted and authenticated.”
The notification further states: “Permanent Account Number or Aadhaar Number along with demographic information or biometric information of an individual should be submitted to the Senior General Manager of Income Tax (Systems) or General Manager of Income Tax (Systems) or to the person authorized by the Senior Managing Director of Income Tax (Systems) or the Managing Director of Income Tax (Systems) with the approval of the Board, for the purposes of authentication referred to in Section 139A.”
Rahul Charkha, Partner, Economic Laws Practice, says: “Before this notification, a bank official had to ensure that the person carrying out such transactions had a PAN. However, in the future, a bank official will have to keep the PAN in the bank’s records and notify the income tax department of these financial transactions. In addition, new rules will apply not only to banks, but also to post offices and the cooperative society.”
Charkha further adds, “The newly inserted rules can be seen as a step by the government towards spreading its weapons in tracking cash deposits/withdrawals to curb the circulation of money in the economy. N already in place, it will be easier for the government to gather all information regarding cash deposits/withdrawals by an individual in one place and track those transactions whether TDS is applicable or not.”
In accordance with the notification, each person must obtain and cite a permanent account number (“PAN”), in which he enters into one of the following transactions:
- Cash deposits totaling Rs 20 lakhs or more during the financial year in one or more accounts at a bank or post office.
- Cash withdrawal or withdrawal totaling Rs 20 lakhs or more during the financial year from one or more accounts at a bank or post office.
- Opening a current account or cash credit with a bank
Aakanksha Goel, Direct Tax Partner, TR Chadha & Co LLP, says: “Previously under Rule 114B, PAN was required to be quoted for cash deposit exceeding Rs 50,000 in a single day, however, no annual aggregate limit for cash deposit has been prescribed.Furthermore, no limit has been prescribed for cash withdrawal, which has also been prescribed now.
She further adds: “The said rules will be applicable from 26 May 2022, and therefore, any person who intends to undertake the aforementioned transactions should obtain the PAN, otherwise, such person would not be able to carry out the above-mentioned transactions.Since the rules are applicable from 26th May 2022, CBDT may need to clarify if the transactions are carried out before 26th May 2022, will be taken into account for the calculation of the aggregate value of INR 20 lakhs for this exercise or not.