The income tax department has made it mandatory to quote the permanent account number (PAN) or Aadhaar number if cash deposits and withdrawals exceed Rs 20 lakh within a year in the bank account, including co-operative banks and post offices. The new rules, which will become effective from May 26, will also be applied on the opening of a current account or cash credit account with bank, cooperative bank or post office.
“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,” according to a notification by the Central Board of Direct Taxes (CBDT) dated May 10.
Column (2) specifically mentions over-Rs 20 lakh withdrawals, cash deposits and opening of current account or cash credit account where the new rules will be applicable.
Column (3) mentions persons who receive PAN and Aadhaar and ensure that the numbers are authenticated. “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 Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898),” according to column (3) of the table in the notification.
The notification said the Principal Director General of Income Tax (Systems) or Director General of Income Tax (Systems) shall lay down the formats and standards along with the procedure for authentication of permanent account number or Aadhaar number.
“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 authorized 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,” according to the notification.
Meanwhile, the government has asked people to link their PAN number with Aadhaar. The finance ministry has said after March 31, 2023, the PAN of taxpayers who fail to intimate their Aadhaar, as required, shall become inoperative and all the consequences under the Act (Income Tax Act, 1961) for not furnishing, intimating or quoting the PAN shall apply to such taxpayers.
The ministry, however, said that till March 31, 2023, the PAN of the assessees who have not intimated their Aadhaar, will continue to be functional for the procedures under the Act, like furnishing of return of income, processing of refunds, etc.
The CBDT through a notification has said those who have not linked their Aadhaar and PAN numbers so far will have to pay a penalty of Rs 500 if done within three months and Rs 1,000 if done beyond that. However, the PAN will remain operative for the time being even if not being linked to Aadhaar.
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