In India, carrying a Permanent Account Number (PAN) card is no longer just for filing taxes. It’s increasingly important for various bank transactions. So, do you need one to deposit cash? The answer depends on the amount you’re depositing. Let’s dive in and see when a PAN card becomes mandatory for depositing cash at banks.
What is a PAN Card?
A PAN card stands for Permanent Account Number card. It is a vital document in India issued by the Income Tax Department. PAN is a 10-digit alphanumeric number that is unique to each individual or entity. It is primarily used for tax purposes, but it is also important for various financial transactions.
PAN Card Requirement for Cash Deposits
In India, a PAN card is not required for every cash deposit in the bank. However, there are certain instances where you must provide your PAN. Here are the requirements:
- For bank deposits exceeding Rs 50,000 in a single day, you need to provide your PAN.
- If your total cash deposits surpass Rs 20 lakh in a financial year, you are required to quote your PAN. This applies to all deposits made across all your bank accounts and post office accounts combined.
New Rule for High-Value Transactions
In 2022, the Central Board of Direct Taxes (CBDT) introduced a new rule that applies to high-value transactions in banks or post offices. Here are the details:
- For deposits or withdrawals exceeding Rs 20 lakh in a financial year, individuals are required to quote either their PAN or Aadhaar.
- This rule also applies to opening current accounts or cash credit accounts.
- The Rs 20 lakh threshold is the aggregate of all deposits or withdrawals within the year and includes transactions with cooperative banks.
Applying for PAN and Opening Accounts
If you are planning to make cash transactions that require quoting PAN or Aadhaar, it is advisable to apply for a PAN at least seven days before the intended transaction date. Similarly, if you wish to open a current or cash credit account with a bank or post office, you must provide your PAN.
Having a PAN card ensures that your cash transactions are compliant with the regulations set by the Income Tax Department. It is always a good idea to stay informed about the latest rules and requirements to avoid any unexpected issues.
The information seems to be general and not specific….
In case of transaction above Rs 50000/- a customer can submit declaration in FORM 60, if PAN is not available.
But in case of transactions above Rs. 20 lakhs he needs to submit PAN only and not FORM 60
You are right