Wednesday, November 16, 2016
The government has announced a new rule to prevent people from making multiple cash deposits in their bank accounts without quoting the PAN. Till now, the limit for cash deposit without PAN was Rs 50,000 per transaction. A lot of people were depositing less than Rs 50,000 per day to escape the PAN provision. But a circular issued on Tuesday says deposits made between 9 Nov and 30 Dec 2016 will require a PAN if the combined sum exceeds Rs 2.5 lakh. This clarifies the misconception that one can deposit cash in multiple batches of less than Rs 50,000 each and escape mentioning the PAN.
The CBDT has also made changes in the (AIR) Annual Information Return rules. Till now, banks and post office branches were supposed to report to the tax department if an individual made cash deposits of Rs 10 lakh in a year. During the period 9 November to 30 December, this limit has been lowered to Rs 2.5 lakh. If the cash deposits exceed this limit, the bank or post office will automatically report it to the tax department. For current accounts, the threshold limit for cash deposits between 9 November and 30 December will be Rs 12.5 lakh.
The rule applies to all bank accounts of the individual, though it is not clear how banks will be able to capture information of cash deposited in other bank accounts.
Source:-The Economic Times