Demonetisation – Cash Deposits combinedly Exceeds Rs. 2.5 Lakh or Rs. 50,000 in a day requires Pan Card

The aam-Admi (Common People) is suffering from the cash crunch and bank line harassment created due to the demonetization of Rs. 500 and Rs. 1000 notes, simultaneously with this, Government has announced a new rule to curb the high cash depositors and to prevent people from making high cash deposits in their bank accounts without quoting of PAN.

Till now the people can deposit cash up to Rs. 50,000 without quoting PAN no. of times up to Rs. 10 lakh in a year but after coming of this rule if someone is depositing more than Rs. 50,000 in a day or combinedly deposit more than Rs. 2.5 Lakh between 9th November to 30th December, he needs to quote his Pan to the Bank and the bank has to show that person name along with its information in the Annual Information Report (AIR) which send to Income Tax Department by the banks.

What are major Takeaways from this notification:

• No Multiple cash deposit can be done in the batches of Rs. 50,000 as if the combined cash deposit exceeds Rs. 2.5 lakh Pan needs to be present before the bank officials.
   
• Earlier the Bank needs to send AIR (Annual Information Report) once the individual made a cash deposit of Rs.10 lakh in a year, but now the same has been changed i.e. for Individual the limit decreased to Rs. 2.5 Lakh and for Current Account Holders the limit set to Rs. 12.5 lakh in between 9th Nov to 30th December 16.
   
• It does not mean Income Tax department is monitoring only Cash transactions; the IT officials has said that they are monitoring each and every transaction held in the bank accounts and we need to be ready to explain the same.
   
• A Press Release has been issued to not grant access to an empty account for converting anyone’s black money into white as it does not mean if up to Rs. 2.5 lakh deposited no scrutiny will be done; IT official can call the account holder and ask for the explanation.

Conclusion

To stop the tax leakages and curb the so-called “Jugaad” in Indian Language, Government has taken these steps, and to our knowledge, these steps would be effective to roll out this massive demonetisation.

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