Income-Tax Fifteenth Amendment) Rules, 2022

The Central Board of Direct Taxes (CBDT) vide a Notification No. 53/2022 dated May 10, 2022, has issued the Income-Tax Fifteenth Amendment) Rules, 2022 to further amend the Income-Tax Rules, 1962. With this amendment, the government has come out with new rules especially pertaining to those making financial transactions without a Permanent Account Number (PAN) or Aadhaar. PAN or Aadhaar made mandatory for cash deposits or withdrawals above Rs 20 lakh. 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.

The Gist of Income-Tax Fifteenth Amendment) Rules, 2022

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.

Section 139A of Income Tax Act – PAN Card is mandatory for this Transaction

Section 139A of the Income Tax Act provides for mandatory obtaining of a Permanent Account Number (PAN) in the following circumstances:

If the total income exceeds Rs. 2,50,000
If total sales, turnover or gross receipts of the business or profession exceeds Rs. 5 Lakh
Where return of income is mandatorily required to be furnished under section 139(4A)
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to furnish a return of fringe benefits (the provisions related to fringe benefits under the Act have since been withdrawn) under section 115WD
If entered into a financial transaction of Rs. 2,50,000 or more in a financial year
Managing Director, Karta, partner, trustee, principal officer, etc., and lastly,
Such other transactions as the CBDT may prescribe.

Section 139(6A) of the Income Tax Act

Section 139(6A) of the Income Tax 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.

Rule 114 of Income-tax Rules

The Board has prescribed Rule 114 in the Rules to prescribe the forms and the procedure for obtaining PAN from the income-tax department.

The gist of transactions that will require mandatory quoting of PAN - Rule 114BA

As per the new rules, furnishing PAN or Aadhaar will be compulsory in the following transactions:

Cash deposit or deposits aggregating to Rs 20 lakh or more in a financial year, in one or more accounts of a person with a banking company or a 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.

cash withdrawal or withdrawals aggregating to Rs 20 lakh or more in a financial year, in one or more accounts of a person with a banking company or a 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.