Personal Finance

Aadhaar or PAN mandatory if cash transactions are above Rs 20 lakh during the year

It is now compulsory to quote your PAN or Aadhar number for cash deposits and withdrawals of Rs 20 lakh or more in a financial year. The person has to submit a PAN or Aadhaar number while opening a current account or a cash credit (CC) account with a bank, including a post office or a co-operative bank. The government has announced the new rules via a notification dated 10th May 2022.

From now on, it will be mandatory for every person entering into the below-specified transactions to present their PAN or Aadhaar number:

1) Cash deposits in all the accounts with a bank, including a co-operative bank or a post office, aggregating to Rs 20 lakh or more in a financial year, or 

2) Cash withdrawals from all the accounts with a bank, including a co-operative bank or a post office, aggregating to Rs 20 lakh or more in a financial year, or

3) While opening a current account or cash credit account with a bank, including a co-operative bank, or a post office

Furthermore, if the person intends to enter into the above transactions, they should apply for a PAN card, at least seven days in advance.

Earlier, PAN number was necessary to quote only on cash deposits over Rs 50,000 in a single day. The government has now made PAN/Aadhaar quoting compulsory for cash deposits and cash withdrawals of Rs 20 lakh or more in a financial year. Earlier, there was no such requirement for cash withdrawals. The income tax department is certainly becoming highly vigilant against cash transactions.

For any clarifications/feedback on the topic, please contact the writer at namita.shah@cleartax.in

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