RBI Wednesday asked banks to ensure customers submit a copy of PAN card for any cash deposit exceeding Rs 50,000, if it is not already seeded with the account, to ensure tax rule compliance in the wake of the recent decision to abolish Rs 500 and Rs 1,000 notes.
New Delhi: RBI Wednesday asked banks to ensure customers submit a copy of PAN card for any cash deposit exceeding Rs 50,000, if it is not already seeded with the account, to ensure tax rule compliance in the wake of the recent decision to abolish Rs 500 and Rs 1,000 notes.
"With a view to ensuring compliance with provisions of 114B of the Income Tax Rules, 1962, the banks are advised that anybody depositing more than Rs 50,000 in cash in their bank account has to submit a copy of the PAN card in case the bank account is not seeded with PAN," Reserve Bank said in a notification.
Besides, RBI has asked banks to insist on their customers to share permanent account number (PAN) for all applicable transactions mandated under the I-T rule.
The RBI directive follows the government order last week withdrawing the legal tender status of high-denomination bank notes -- Rs 500 and Rs 1,000 -- specifically.
The government had to resort to such a drastic measure in a surprise announcement to curb the menace of black money, check circulation of fake notes as well as deter funding terrorism in the country, Prime Minister Narendra Modi had said on November 8.
As per 114B under income tax rules, every person is required to quote PAN for all documents pertaining to a time deposit with a bank or co-operative bank, post office, Nidhi or
non-banking financial company which is allowed to accept deposits if the amount is more than Rs 50,000 or aggregating over Rs 5 lakh during during a financial year.
Besides, customers also have to furnish PAN details for all transactions related to sale or purchase of motor vehicle/s, opening a bank account, applying a credit or debit card, opening a demat account and the like.
If a customer pays over Rs 50,000 in cash for paying hotels bills or travel to a foreign country or buying foreign currency, he has to quote the PAN too.
Payment of over Rs 50,000 towards buying a mutual fund, bonds, bank drafts or pay orders and many other transactions also attract the same rules, according to the I-T ruling.
The government has been keeping a close vigil on the kind of deposits in bank accounts following the recent order and those who will deposit over Rs 2.5 lakh in cash will be scrutinised.