In a notification issued on May 10, 2022, the government has come out with new rules especially pertaining to those making financial transactions without a Permanent Account Number (PAN) or Aadhaar. The Central Board of Direct Taxes has made new rules, called the Income–tax (Fifteenth Amendment) Rules, 2022.
As per the new rules, furnishing PAN or Aadhaar will be compulsory in the following transactions:
(a) Cash deposit or deposits aggregating to Rs 20 lakh or more in a financial year, in one or more account of a person with a banking company or a co-operative bank or a Post Office;
(b) cash withdrawal or withdrawals aggregating to Rs 20 lakh or more in a financial year, in one or more account of a person with a banking company or a co-operative bank or a Post Office;
(c) opening of a current account or cash credit account by a person with a banking company or a co-operative bank or a Post Office
Shailesh Kumar, Partner, Nangia & Co LLP says, “The Government has constantly been striving to increase its taxpayer base to be able to bring such people under the tax net who may be entering into large transactions but do not hold a PAN. In today’s scenario it may be necessary for a person to hold a valid PAN basis the nature of transaction(s) entered by them even though the person may or may not have taxable income. The intent of the circular is based on this view. Once such person quotes the PAN it will be easier for the tax authorities to track the transactions. It may eventually become difficult where a person tries to avoid filing return of income.”
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The permanent account number or Aadhaar number along with demographic information or biometric information of an individual shall be submitted to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or the person authorised by the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) with the approval of the Board, for the purposes of authentication referred to in section 139A.
