CBDT mandates PAN for cash deposit/withdrawal of Rs. 20 lakh or more

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  • Last Updated on 12 May, 2022

CBDT mandates PAN for cash deposit and withdrawal

Notification No. 53/2022, dated 10-05-2022

Section 139A of the Income-tax Act prescribes certain transactions wherein it is mandatory for a person to obtain a Permanent Account Number (PAN). It also lists down the situations where quoting PAN is mandatory. Further, Rule 114 provides for the manner and timelines for making an application for the allotment of a PAN if the provisions of section 139A are applicable.

The Central Board of Direct Taxes (CBDT) has notified some additional transactions wherein a person is required to obtain PAN. The Board has notified new Rule 114BA and Rule 114BB enhancing the scope of obtaining and quoting PAN. The board has also amended the existing Rule 114 prescribing the time limit for making applications for PAN in newly notified transactions.

The changes brought by the board have been discussed in the following paragraphs:

1. A new list of transactions
The Board has notified new Rule 114BA which provides a list of transactions wherein it shall be mandatory for a person to obtain PAN. Obtaining PAN is mandatory if a person has entered into the following transactions:

a) Cash deposit, aggregating to Rs. 20 lakh or more, in a financial year in Bank or Post Office.
b) Cash withdrawal, aggregating to Rs. 20 lakh or more, in a financial year in Bank or Post Office.
c) Opening of a current account or a cash credit account with a bank or a post office.

The provisions of Rule 114BA are applicable with effect from 25-05-2022.

Note: If a person has maintained one or more accounts with a bank then the deposit or withdrawal from each of such accounts shall be taken into consideration to calculate the limit of Rs. 20 lakh.

Further, as per the new Rule 114BB, if a person has entered into any of the above-notified transactions then it shall be mandatory for him to quote PAN or Aadhaar number in the documents pertaining to such transactions.

Every person who receives such document shall ensure that the PAN or Aadhaar number has been duly quoted and authenticated.

The provisions of Rule 114BB are applicable with effect from 09-07-2022.

2. Time limit for making an application to obtain PAN
The board has amended the existing Rule 114 to provide the time limit for making an application in case of a person who intends to enter into transactions referred to in Rule 114BA.
It has been provided that such person shall be required to make an application for allotment of PAN at least 7 days before the date on which he intends to enter into the said transaction.

Click Here To Read The Full Notification

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