From today, May 26, the system of withdrawing or depositing cash in India is set to change.
Now onwards, it will be mandatory for people to quote their PAN card or Aadhaar card number for withdrawals or deposits of Rs 20 lakh or above from bank accounts, including cooperative banks and post offices, in a financial year.
These rules will also apply when a current account is opened. Furthermore, a person must apply for a PAN card at least seven days before engaging in any aforementioned transactions.
The Central Board of Direct Taxes (CBDT) had announced these rules in a notification dated May 10.
The notification covers the following transactions:
1) Cash deposits in one or more accounts with a banking institution, a cooperative bank, or a post office totalling Rs 20 lakh or more in a financial year.
2) Cash withdrawal or withdrawals in one or more accounts with a banking firm, a cooperative bank, or a post office of Rs 20 lakh or more in a financial year.
3) Opening of a current account or cash credit account by an individual with a banking company, cooperative bank or post office.
As per the notification, "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 about 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."
The CBDT notification also states that an individual's PAN or Aadhaar number, along with demographic or biographic information, must be submitted to the principal director general of Income Tax (Systems), the director-general of Income Tax (Systems), or an official authorised by either, for authentication purposes as defined in section 139. (A).
The format and requirements for PAN or Aadhaar authentication would be established by the principal director general, director general, or an official authorised by either.
The circular's major goal, according to reports, is to prevent unexplained financial transactions through the cash route.
Previously, a PAN card number was only necessary while depositing cash over Rs 50,000 in a single day, but there was no yearly restriction for cash deposit or withdrawal.