The authorities has made it necessary to cite both PAN or Aadhaar for depositing or withdrawing over Rs 20 lakh in a monetary yr or opening of a present account.
The Central Board of Direct Taxes (CBDT), in a notification, mentioned furnishing the Permanent Account Number (PAN) or biometric Aadhaar will probably be necessary for such high-value deposits or withdrawals from banks in a monetary yr, or opening of a present account or money credit score account with a financial institution or put up workplace.
Commenting on the transfer, AKM Global Tax Partner Sandeep Sehgal mentioned this shall deliver in additional transparency to monetary transactions the place banks, put up places of work and co-operative societies can be required to report the transactions of deposits and withdrawals aggregating to Rs 20 lakh or extra in a monetary yr.
“Further, the mandatory condition of obtaining PAN for deposit and even for withdrawals would help the government in tracing the movement of cash in the system. All in all, this would tighten the entire process of suspicious cash deposits and withdrawals with the already present TDS provision u/s 194N under the Income-tax Act, 1961,” Sehgal mentioned.
Currently, PAN and Aadhaar are interchangeable for revenue tax objective.
An assessee wants to say his/her PAN in all communications with the I-T division and whereas getting into into specified monetary transactions.
However, there could be conditions the place an individual getting into into high-value transactions, comparable to buy of overseas foreign money or enormous withdrawal from banks, doesn’t possess a PAN.
The Finance Act, 2019, has supplied for interchangeability of PAN with Aadhaar.
It has been supplied that each one who is required to furnish or quote his PAN beneath the Income Tax Act, and who has not been allotted a PAN however possesses the Aadhaar quantity, might furnish the biometric ID in lieu of PAN.
Nangia & Co LLP Partner Shailesh Kumar mentioned as soon as such individual quotes the PAN will probably be simpler for the tax authorities to trace the transactions.
“The government has constantly been striving to increase its taxpayer base to be able to bring such people under the tax net who may be entering into large transactions but do not hold a PAN,” Kumar mentioned.
It might ultimately turn into troublesome the place an individual tries to keep away from submitting return of revenue, he added.