Demonetisation - I-T Monitor
Deposits between 9th November and 30th December - PAN and Financial Statement Mandatory
THE demonetisation of old Rs.500 and Rs.1000 currency notes has led to unfathomable modes of exchanging the same into legitimate currency. And the Government wants to send out a clear message that it is not going to be mute spectator while money is getting laundered right royally.
As per Rule 114B of the Income Tax Rules, quoting of PAN is mandatory in cases of certain transactions exceeding 50000 rupees. Now the deposits in banks from 9th November to 30th December 2016 (consequent to the monetisation) also come under this category.
As per Rule 114E of the Income Tax Rules, certain transactions are to be reported to the Income Tax Department by banks and other authorities. Now this is made applicable to deposits of more than 12.5 lakhs in current accounts and 2.5 lakhs in other accounts from 9th November to 30th December 2016.
The CBDT has amended the below mentioned Income Tax rules in the following fashion -
114B. Transactions in relation to which permanent account number is to be quoted in all documents.
In Rule 114B, in the Table, Serial no. 10 and the entries relating thereto are substituted with the following -
Sl. No. | Nature of Transaction | Value of Transaction |
|---|---|---|
(1) | (2) | (3) |
10. | Deposit with,- (i) a banking company or a cooperative 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); (ii) Post Office. | Cash deposits,- (i) exceeding fifty thousand rupees during any one day; or (ii) aggregating to more than two lakh fifty thousand rupees during the period 09th November, 2016 to 30th December, 2016.". |
114E. Furnishing of statement of financial transaction
In rule 114E, in sub-rule (2), in the Table, after serial number 11 and entries relating thereto the following serial number and entries shall be inserted -
Sl. No. | Nature and value of Transaction | Class of person (reporting person) |
|---|---|---|
(1) | (2) | (3) |
12. | Cash deposits during the period 09th November, 2016 to 30th December, 2016 aggregating to - (i) twelve lakh fifty thousand rupees or more, in one or more current account of a person; or (ii) two lakh fifty thousand rupees or more, in one or more accounts (other than a current account) of a person. | (i) 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); (ii) Post Master General as referred to in clause (j) of section 2 of the Indian Post Office Act, 1898 (6 of 1898)."; |
In sub-rule (5), the following proviso is inserted -
Provided the statement of financial transaction in respect of the transactions listed at serial number (12) in the Table under sub-rule (2), shall be furnished on or before the 31st day of January, 2017.
Notification , Dated: November 15, 2016
RBI also instructs:
The Reserve Bank of India has advised the Banks that:
1. 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
2. In addition to the above provision, in the IT Rules, PAN reporting requirements are there for other transactions, which banks need to insist upon.
The banks are, therefore, advised to take note of the above and ensure strict compliance with the provisions of 114B of the Income Tax Rules, 1962.