CBDT vide Notification No. 53/2022 dated 10.05.2022 in G.S.R. 346(E) through Income-tax (Fifteenth Amendment) Rules, 2022 amends Rule 114 of the Income-tax Rules, 1962 and inserts new Rule 114BA and Rule 114BB for the purpose of notifying transactions for which it will be mandatorily required to quote PAN as per the provisions of section 139A(1)(vii) and section 139(6A) of the Income-tax Act, 1961 (‘Act’).
Gist of transactions which will require mandatory quoting of PAN
Rule 114BA
● Cash deposits in aggregate of Rs. 20 Lakh and more in a financial year in one or more accounts maintained with a bank, co-operative bank and post-office.
● Cash withdrawals in aggregate of Rs. 20 Lakh and more in a financial year from one or more accounts maintained with a bank, co-operative bank and post-office.
● For opening a current account or cash credit account with a bank, co-operative bank and post-office.
The above provisions shall come into effect from 26th May, 2022.
Application for PAN
Rule 114
The person who intends to enter into the above transactions shall apply for PAN in Form 49A at least 7 days before the date of transaction.
Authentication of PAN or Aadhaar Number
Rule 114BB
The bank or the co-operative bank or the Post Master General shall authenticate the PAN or Aadhaar Number quoted in the documents for carrying out the above transactions. This shall come into effect from 10th July, 2022.
This notification shall come into force from 26th May, 2022 i.e after the expiry of 15 days from its publication in the Official Gazette.
Section 139A of the Act provides for mandatory obtaining of a Permanent Account Number (PAN). Sub-section (1) of the said section provides that certain persons in the following circumstances shall obtain PAN from the income-tax department-
1. If the total income exceeds Rs. 2,50,000
2. If total sales, turnover or gross receipts of the business or profession exceeds Rs. 5 Lakh
3. Where return of income is mandatorily required to be furnished under section 139(4A)
4. Where an employer is mandatorily required to furnish a return of fringe benefits (the provisions related to fringe benefits under the Act have since been withdrawn) under section 115WD
5. If entered into a financial transaction of Rs. 2,50,000 or more in a financial year
6. Managing Director, Karta, partner, trustee, principal officer, etc. and lastly,
7. Such other transactions as the Board may prescribe.
Section 139(6A) of the Act provides for mandatory quoting of PAN or Aadhaar number in the prescribed transactions and authentication of such PAN or Aadhaar number in the prescribed manner.
The Board has prescribed Rule 114 in the Rules to prescribe for the forms and the procedure for obtaining PAN from the income-tax department.
Amendment No. 1
The said rule 114 is amended to apply for PAN if any person intends to undertake any prescribed transactions as per clause (vii) of section 139A.
A new clause (vii) is inserted in rule 114(3) to prescribe that any person intending to enter into any transaction prescribed under clause (vii) of sub-section (1) of section 139A shall at least 7 days before the date of the transaction apply for allotment of PAN in the prescribed form and manner.
Amendment No. 2
Further, the Board has prescribed transactions under clause (vii) of sub-section (1) of section 139A and for this purpose, a new Rule 114BA is inserted in the Rules.
The following transactions have been notified or prescribed under section 139A(1)(vii) by rule 114BA-
1. Deposit of aggregate cash of Rs. 20 Lakh or more in a financial year in one or more accounts of the person maintained with a bank, co-operative bank or a Post Office.
All the cash deposits into all the bank accounts of the person in a financial year will be aggregated to calculate the threshold limit of Rs. 20 Lakh.
2. Withdrawal of aggregate cash of Rs. 20 Lakh or more in a financial year in one or more accounts of the person maintained with a bank, co-operative bank or a Post Office.
All the cash withdrawals from all the bank accounts of the person in a financial year will be aggregated to calculate the threshold limit of Rs. 20 Lakh.
3. Opening of a current account or cash credit account by a person with a bank, co-operative bank or a Post Office.
This criterion is based on activity rather than monetary transactions.
Amendment No. 3
A new rule 114BB is inserted to prescribe the person who shall ensure that the PAN is quoted in the documents pertaining to these transactions and the same is authenticated as per the provisions of section 139(6A).
In case cash is deposited or withdrawn from a bank account or a co-operative bank account for Rs. 20 Lakh or more or in case of opening a current account or cash credit account with a bank account or a co-operative bank account, then the notified person is the bank or the co-operative bank which shall ensure that PAN is quoted in the documents and is authenticated.
In case cash is deposited or withdrawn from a post office account for Rs. 20 Lakh or more or in case of opening a current account or cash credit account with the Post Office, then the notified person is the Post Master General which shall ensure that PAN is quoted in the documents and is authenticated.
Rule 114BB shall come into force from 10th July, 2022 i.e. after the expiry of 60 days from publication of this notification in the Official Gazette.
It is noteworthy that Rule 114B already mandates quoting of PAN for opening a bank account with a bank and cash deposits in excess of Rs. 50,000 in a day.
Read the full text of CBDT Notification No. 53/2022 dated 10.05.2022 on Mandatory Quoting of PAN for Banking Transactions
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 10th May, 2022
G.S.R. 346(E).–In exercise of the powers conferred by clause (vii) of sub-section (1), sub-section (6A) of section 139A, and clause (ab) of Explanation to the said section read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. Short title and commencement.– (1) These rules may be called the Income–tax (Fifteenth Amendment) Rules, 2022.
(2) Save as otherwise provided in these rules, they shall come into force after the expiry of fifteen days from the date of their publication in the Official Gazette.
2. In the Income-tax Rules, 1962,–
(a) in rule 114, in sub-rule (3), after clause (vi), the following clause shall be inserted, namely:—
“(vii) in the case of a person who intends to enter into the transaction prescribed under clause (vii) of sub-section (1) of section 139A, at least seven days before the date on which he intends to enter into the said transaction.”;
(b) after rule 114B, the following rule shall be inserted, namely:―
“114BA. Transactions for the purposes of clause (vii) of sub-section (1) of section 139A.– The following shall be the transactions for the purposes of clause (vii) of sub-section (1) of section 139A, namely:-
(a) cash deposit or deposits aggregating to twenty lakh rupees or more in a financial year, in one or more account of a person with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) or a Post Office;
(b) cash withdrawal or withdrawals aggregating to twenty lakh rupees or more in a financial year, in one or more account of a person with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) 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 to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act) or a Post Office.”
(c) after rule 114BA, as so inserted by the Income-tax (Fifteenth Amendment) Rules, 2022, the following rule shall be inserted after the expiry of sixty days from the date on which this notification is published in the Official Gazette, namely:—
“114BB. Transactions for the purposes of sub-section (6A) of section 139A and prescribed person for the purposes of clause (ab) of Explanation to section 139A.– (1) Every person shall, at the time of entering into a transaction specified in column (2) of the Table below, quote his permanent account number or Aadhaar number, as the case may be, in documents pertaining to such transaction, and every person specified in column (3) of the said Table, who receives such document, shall ensure that the said number has been duly quoted and authenticated—
(2) The permanent account number or Aadhaar number alongwith 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.
(3) Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) shall lay down the formats and standards along with procedure for authentication of permanent account number or Aadhaar number.”.
[Notification No. 53/2022/F.No. 370142/49/2020-TPL]
SHEFALI SINGH, Under Secy., Tax Policy and Legislation
Note:- The principal rules were published vide notification S.O. 969(E), dated the 26th March, 1962 and last amended vide notification GSR 343(E), dated the 09th May, 2022.
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