PAN, Aadhar is now mandatory for cash transactions

PAN, AADHAR IS NOW MANDATORY FOR CASH TRANSACTIONS ABOVE RS.20 LAKH

The CBDT vide Notification No. 53/2022-Income Tax Dated: 10th May, 2022 notified a new set of rules to amend the existing Income-tax Rules, 1962 which shall come into force after the expiry of 15 days from the date of its publication in the Official Gazette (except Rule 114BB). The purpose of this amendment is to prescribe three new transactions for the purpose of invoking the mandate of applying for PAN.

EXISTING RULE:

PAN is currently required for cash deposits of Rs 50,000 or more per day. With these restrictions, a total annual threshold of Rs 20 lakh has been set. From which date it is applicable On May 10, 2022, the Central Board of Direct Taxes (CBDT) issued a notification in this regard. The new regulations will take effect on May 26, 2022.What notification stated As per the notification, “Every person shall, at the time of entering into a transaction specified below , quote his permanent account number or Aadhaar number, as the case may be, in documents pertaining to such transaction, and every person specified below, who receives such document, shall ensure that the said number has been duly quoted and authenticated.”

AMENDMENT:

Insertion: Rule 114(3)(vii)

(vii) in the case of a person who intends to enter into the transaction prescribed under clause (vii) of sub-section (1) of section 139A, at least seven days before the date on which he intends to enter into the said transaction.

An application for PAN under sub-rule (1) of this rule shall be made by a person at least 7 days before the date on which he intends to enter into a transaction prescribed under section 139A(1)(vii) of the Act. Section 139A(1)(vii) provides that in the interest of revenue, the Board may prescribe such other transactions as may be found suitable, to make it mandatory for the person intending to enter into such transactions to apply for PAN.

Insertion: after rule 114B 114BA.

Transactions for the purposes of clause (vii) of sub-section (1) of section 139A. The following shall be the transactions for the purposes of clause (vii) of sub-section (1) of section 139A, namely: (a) cash deposit or deposits aggregating to twenty lakh rupees or more in a financial year, in one or more account of a person with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) or a Post Office; (b) cash withdrawal or withdrawals aggregating to twenty lakh rupees or more in a financial year, in one or more account of a person with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) or a Post Office;

To fulfil the purpose of the previous amendment, the transactions under Section 139A(1)(vii) are prescribed by the Board by inserting a new rule i.e., 114BA. In simple terms, in addition to the existing criteria, PAN shall be mandatory for the following transactions:

a. Cash deposits of ₹20 lakhs or more in a F.Y. in one or more accounts of a person with a banking company, co-operative bank and post office.

b. Cash withdrawals of ₹20 lakhs or more in a F.Y. from one or more accounts of a person with a banking company, co-operative bank and post office. c. Opening of a current account or cash credit account with a banking company, co-operative bank or post office.

Insertion: after Rule 114BA

After rule 114BA, as so inserted by the Income-tax (Fifteenth Amendment) Rules, 2022, the following rule shall be inserted after the expiry of sixty days from the date on which this notification is published in the Official Gazette, namely: 114BB.

Transactions for the purposes of sub-section (6A) of section 139A and prescribed person for the purposes of clause (ab) of Explanation to section 139A.––

(1) Every person shall, at the time of entering into a transaction specified below , quote his permanent account number or Aadhaar number, as the case may be, in documents pertaining to such transaction, and every person specified below, who receives such document, shall ensure that the said number has been duly quoted and authenticated—

a. Cash deposit or deposits aggregating to twenty lakh rupees or more in a financial year, in one or more account of a person with, —

(i) A banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act); (ii) Post Office

b. Cash withdrawal or withdrawals aggregating to twenty lakh rupees or more in a financial year, in one or more account of a person with, —

c. Cash withdrawal or withdrawals aggregating to twenty lakh rupees or more in a financial year, in one or more account of a person with, —

Deadline for linking PAN-Aadhar:

The deadline for maintaining your PAN active without linking it to your Aadhaar has been extended from March 31, 2022 to March 31, 2023. However, starting April 1, 2022, linking your PAN and Aadhaar will cost you money. The Central Board of Direct Taxes (CBDT) notified this via a notification dated March 29, 2022, as well as a press release on March 30, 2022.