Transactions where obtaining and quoting of PAN is mandatory

Various sections of the Income Tax Act make obtaining PAN mandatory and transactions where quoting PAN is mandatory to ensure the same is authenticated.

On 10th of May 2022, the CBDT notified¹ transactions where PAN must be obtained by the person entering into such transactions . This has been inserted in Rule 114 BA, in the Income Tax rules, 1962 (IT Rules).

The summary of the transactions for which PAN must be obtained are:

1. Deposit of cash totalling to INR 20 lakhs or more in a fiscal year in one or more accounts of a person with a Bank/Co-operative Bank/ Post Office.
2. Withdrawal of cash totalling to INR 20 lakhs or more in a fiscal year in one or more accounts of a person with a Bank/Co-operative Bank/ Post Office.
3. Opening a current account or cash credit account by a person with a Bank/Co-operative Bank/ Post Office.

The taxpayers entering into such transactions must make the application at least 7 days prior to such transactions.

The notification also inserted Rule 114BB in the IT rules, stating that the banks/co-operative banks/postmaster general receiving the documents must verify that the PAN or AADHAR number is duly quoted and authenticated.

The notification will be effective from 25th of May, 2022.

1CBDT Notification No. 53/2022 dated 10 May 2022