The Central Government has made PAN card or Aadhar card mandatory for depositing or withdrawing more than Rs 20 lakh in current account in a year. In a notification, the Central Board of Direct Taxes said that it will be mandatory to furnish PAN or biometric Aadhaar for depositing or withdrawing such cash from banks in a financial year or for opening a current account or opening a cash credit account with a bank or at a post office.
Banks, post offices and co-operative societies will be required to report deposits and withdrawal transactions aggregating to Rs 20 lakh or more in a financial year. As of now, PAN card is required to be presented for cash deposits of Rs 50,000 or more in a day. But now with these rules, a limit of Rs 20 lakh has been set for the entire financial year.
What is the intention of the government: According to a report, the intention of the government is to bring those people who do transactions of more rupees but do not have a PAN number. That’s why they easily run away without paying taxes and have black money with them. With the implementation of the new rules, it will be much easier for the government to track the money circulation, which will help the Income Tax Department a lot.
Commenting on the new rules, Sandeep Sehgal, Tax Partner, AKM Global, said, “The new rule of the government will bring more transparency in transactions. Banks, post offices and co-operative societies will be required to report deposits and withdrawal transactions totaling Rs 20 lakh or more in a financial year. The condition of obtaining PAN for deposits and withdrawals will help the government to trace the movement of cash in the system.”
Shailesh Kumar, LLP partner, Nangia & Co, said once such a person is linked with PAN, it will be easier for the tax authorities to track the transaction. He said that the government is continuously making efforts to widen its taxpayer base to bring such people into the tax net, who are entering into large transactions but do not hold PAN.