PAN needed for cumulative deposits exceeding Rs.2.5 lakh

PAN needed for cumulative deposits exceeding Rs.2.5 lakh

The Reserve Bank of India (RBI) has made it difficult for people to circumvent rules and make multiple cash deposits in their bank accounts without quoting their PAN.

According to a circular issued on Wednesday, deposits made between November 9 and December 30 will require quoting of PAN if the combined sum deposited exceeds Rs.2.5 lakh.

This move is significant as bank deposits have surged following the demonetisation of Rs.500 and Rs.1,000 notes.

Till now, PAN was required only for cash deposits more than Rs.50,000 per transaction. Customers tended to deposit a few rupees less than Rs.50,000 a day to avoid the PAN provision.

I-T reporting

The government has also made it mandatory for banks, co-operative banks and post offices to report to the Income-Tax Department all deposits above Rs.2.5 lakh in savings accounts, and more than Rs. 12.5 lakh in current accounts made during the 50-day window provided to tender the old notes.

According to a notification by the Central Board of Direct Taxes (CBDT), banks, co-operative banks and post offices will have to report to the tax department cash deposits exceeding Rs. 50,000 in a single day or aggregating more than Rs.2.5 lakh in the time-window provided for exchange of the old notes i.e. till December 30.

They have also been told to report to the I-T department cash deposits in the period aggregating to Rs. 12.5 lakh or more in one or more current accounts of a person. Banks and post offices will now have to file a statement in respect of these transactions by January 31, 2017, it said.

Source: The Hindu

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