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PAN/Aadhaar must for cash transactions of over Rs 20 lakh

New Delhi, May 11

The government has made it mandatory to quote either PAN or Aadhaar for depositing or withdrawing over Rs 20 lakh in a financial year or opening of a current account.

The Central Board of Direct Taxes (CBDT), in a notification, said furnishing the Permanent Account Number (PAN) or biometric Aadhaar will be mandatory for such high-value deposits or withdrawals from banks in a financial year, or opening of a current account or cash credit account with a bank or post office.

Commenting on the move, AKM Global Tax Partner Sandeep Sehgal said this will bring in more transparency to financial transactions where banks, post offices and co-operative societies would be required to report the transactions of deposits and withdrawals aggregating to Rs 20 lakh or more in a financial year.

“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 said.

Currently, PAN and Aadhaar are interchangeable for income tax purpose. — PTI

Move to bring in more transparency

Quoting PAN or Aadhaar will also be mandatory for opening a current account or cash credit account with a bank or post office
This will tighten the entire process of suspicious cash deposits and withdrawals with the already present TDS provision u/s 194N of the Income-tax Act

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