Demonetisation: Now, PAN required if combined cash deposits exceed Rs 2.5 lakh till December 30

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 tranches of less than Rs 50,000 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.

The demonetisation of Rs 500 and Rs 1,000 currency notes is a “very good
step” to curb the menace of black money and will help check stashing of funds to a large
extent, the CBDT chief today said as the department prepares to keep an eye on any
suspicious transcation.

An important step by govt to curb blackmoney: CBDT chief

“This is a very important step. This decision shows that the government has no tolerance for black money,” Central Board of Direct Taxes Chairman Sushil Chandra told PTI.

He said “at this moment”, the annoucement made by Prime Minister Narendra Modi in this regard last night will help in curbing the menace to a “large extent”.

He said the IT department and the CBDT are working out modalities of the role that they will “specifically” play in the aftermath of the decision made wherein Rs 500 and Rs 1,000
currency notes are not a legal tender from today.

Sources in the department said the taxman would be keeping an eye on remittances made using the two currency notes, beyond a certain threshold.

The department would work in close coordination with banks and the Financial Intelligence Unit to keep an eye on suspicious transactions resulting after the demonetisation of the two big currencies, they said.

Source : Compilation of NewsArticles of 16th November’2016

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