The Central Board of Direct Taxes (CBDT) announced the new rule, along with the date of implementation, in a notification dated May 10.
The cash withdrawal and deposit system in the country is set to undergo a major change from tomorrow, i.e. Thursday, May 26, as it will now be mandatory for citizens to quote their PAN card or Aadhaar card number for cash withdrawals/deposits amounting to ₹20 lakh or more in a single financial year.
The new rule was announced by the Central Board of Direct Taxes (CBDT) in a notification dated May 10. “The term transactions includes deposit/withdrawal of cash amounting to ₹20 lakh or more in a financial year through one or bank accounts. Account(s) not just with commercial bank, but even co-operative bank or post offices,” the notification read.
The fresh guideline will also be applicable for the opening of a current bank account or cash credit account by a person with a banking company or a co-operative bank or a post office.
Additionally, a person is required to apply for PAN at least seven days before making any of the aforementioned transactions.
The CBDT notification, meanwhile, also stipulates that the PAN or Aadhaar, with demographic or biographic information of an individual, shall be submitted to the principal director general of Income Tax (Systems), or director general of Income Tax (Systems), or an official authorised by either, for the purpose of authentication as referred to in section 139(A).
The principal director general, or director general, or the official authorised by either, would lay down the format and standards along with the procedure for authentication of PAN or Aadhaar.