Wondering if you need a PAN card for cash deposits in your bank account? Navigating the banking regulations can be tricky, but understanding the rules can save you from unexpected hassles. Here’s what you need to know to ensure your cash transactions are smooth and compliant.
What Is a PAN number?
A PAN card stands for Permanent Account Number card. It’s a vital document in India issued by the Income Tax Department. PAN is a 10-digit alphanumeric number (letters and numbers) that’s unique to each individual or entity.
It’s primarily used for tax purposes, but it’s also important for various financial transactions.
Is PAN Card Required For Cash Deposit?
In India, a PAN card isn’t required for every cash deposit in the bank. However, you must provide your PAN for bank deposits exceeding Rs 50,000 in a single day. Additionally, quoting your PAN is mandatory if your total cash deposits surpass Rs 20 lakh in a financial year.
This applies to all deposits made across all your bank accounts and post office accounts combined.
CBDT Made the Change in 2022
In 2022, the Central Board of Direct Taxes (CBDT) introduced a new rule requiring individuals to quote either their PAN or Aadhaar for deposits or withdrawals exceeding Rs 20 lakh in a financial year. This applies to high-value transactions in banks or post offices, as well as to opening current accounts or cash credit accounts.
For any cash deposit or withdrawal over Rs 20 lakh across one or more bank or post office accounts in a financial year, quoting PAN or Aadhaar is mandatory. This Rs 20 lakh threshold is the aggregate of all deposits or withdrawals within the year and includes transactions with cooperative banks.
Anyone planning to make such transactions should apply for a PAN at least seven days before the intended transaction date. Similarly, those wishing to open a current or cash credit account with a bank or post office must provide their PAN.
Namit writes on personal finance, economy and brands. Currently contributing to News18.com as a Senior Sub Editor in the business vertical. Prior to t . Read More
