Soon, you will have to provide your PAN or Aadhaar if you wish to withdraw or deposit more than Rs 2 lakh in a financial year. In a notification dated May 10, the Central Board of Direct Taxes (CBDT) said this would apply to cash transactions at banks (including cooperative banks and post offices) exceeding this limit. You must force quoting PAN or Aadhaar. You can even open a checking or cash credit account at a bank or post office.

The main purpose of this circular is to check unregistered financial transactions through the cash route. On this basis, the IT department will match the transaction with previous I-T returns. Jain added that if there were any discrepancies, it would send a high-value transaction notice asking the taxpayer to explain and provide information on the source of the cash.

Citing PAN or Aadhaar when executing large transactions will force savers to file income tax returns or face the wrath of tax officials. In the absence of PAN or Aadhaar, “under the new rules, the depositor must apply for these at least seven days before he wants to make a transaction”. The CBDT notification makes it clear that the responsibility for ensuring compliance with the rules rests with account holders and institutions such as banks and post offices.

The PAN must be referenced when filing income tax returns or communicating with income tax authorities. In addition to this, PAN must be referenced in various other financial transactions. For example, a PAN is required to open a bank or Demat account or use a credit or debit card. Details of PAN are mandatory even if the amount invested in mutual funds, bonds or bonds exceeds Rs 50,000. Likewise, PANs must pay life insurance premiums totalling more than Rs 50,000 to insurance companies in a financial year.

You are also required to deposit more than Rs 50,000 in cash on any day or a fixed deposit (fixed deposit) of more than Rs 50,000 on any day or in a banking company or cooperative bank, post office or non-bank financial company for a financial year.

PAN also needs to be mentioned when selling or buying vehicles other than motor vehicles or two-wheelers. It must be quoted when paying cash over Rs 50,000 to a hotel or restaurant, travelling to any foreign country, or purchasing any foreign currency. If PAN is not available in some of these transactions, the Aadhaar number can be referenced. However, failure to mention or provide PAN or Aadhaar in a mandatory situation may result in notification and penalties.