From May 26, the banking system of withdrawing or depositing is getting revised for the customers. The Centre has made it clear that the customers will have to provide an Aadhaar Number and PAN Card for withdrawing or depositing cash more than ₹20 Lakh from the Banks or Post Offices in a Financial year. This newly imposed rule is also applicable at the time of opening a new current account, as said by the Central Board of Direct Taxes or CBDT in a notification.
Banks Will Act According To The Notice Of CBDT
CBDT notice issued on May 10 said, “Every person shall, at the time of 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 pertaining to 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.”
2 and 3 columns mentioned in this notice point out in which case the rule will be applied, and also pointed out that a person who receives PAN and Aadhaar make sure that they are certified.
Earlier the matter was very different, only the person depositing cash of ₹50,000 or more in a single account has to provide his or her PAN Card. Thus, there were no rules under which an annual limit is set for deposit and withdrawal as per Rule 114 B.
Notice Further Defined Banks Rules
The notice states, “The permanent account number or Aadhaar number along with demographic information or biometric information of an individual shall be submitted to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or the person authorised 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 founder of Taxbuddy.com, Sujit Bangar said, “Section 139A specifies the persons or transactions who should apply for and quote PAN. However, since it could not cover all kinds of persons and transactions, it has delegated this to the Central Government. Hence CBDT can prescribe such transactions and persons. The CBDT, through this circular, has accordingly prescribed the transactions of cash deposits and withdrawals of more than Rs. 20 lakhs through a bank or post office and opening of the current account or cash credit account as specified transactions for applying for PAN.”
He further added, “The persons who are entering into such transactions must apply for PAN at least 7 days before he/she intends to undertake these transactions. If a person who is already having PAN is required to quote his/her PAN while carrying out these transactions of cash deposits/withdrawals of more than Rs.20 lakhs and opening of a current account or a cash credit account.”
As Per CA Ruchika Bhagat
MD, Neeraj Bhagat & Co, CA Ruchika Bhagat said, “The PAN-AADHAAR reciprocity will help banks to record details for those who don’t have PAN. This may help the tax department to plug some loopholes, such as for those high-value deposits and withdrawals where they say they don’t have PAN. This could be applied in the case of agriculturists or the non-income taxpayers.”