IN A new set of rules notified on Saturday, the Ministry of Finance has asked banks and post offices to furnish details of cash deposits made during April 1-November 9 last year for amounts adding up to Rs 2.5 lakh or more per person, in all accounts other than current accounts.
For current accounts, banks and post offices have to give details of cash deposits adding up to Rs 12.5 lakh or more per person in the same period.
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The ministry has also directed bank account holders who have not given their Permanent Account Number (PAN) or Form 60 to do so by February 28.
The ministry’s latest directive, making changes to Rule 114 E of the Income-Tax Rules, 1962, follows its November notification wherein it had asked banks and post offices to furnish information of cash deposits, as per the specified limits, made after the demonetisation decision — from November 9 to December 30.
Banks and post offices have been asked to submit details of these transactions by January 15.
The notification states that the February 28 deadline for furnishing PAN or Form 60 is not applicable to those who have time deposits or a Basic Savings Bank Deposit Account (BSBDA).
Tax experts said the directive on PAN would help to link bank accounts with tax details of the person, making it easier for authorities to detect any tax evasion.
The directive on account history of cash deposits will help the tax authorities compare details for the period before and after the demonetisation decision on November 8.
Quoting of PAN is already mandatory for cash deposits exceeding Rs 50,000 in a day. The Central Board of Direct Taxes (CBDT) had also made it mandatory to quote PAN for cash deposits of Rs 2.5 lakh or more made during November 9-December 30, 2016, as per an amendment notified on November 15.
Form 60 has to be submitted by those who do not have a PAN but undertake any of the transactions covered under Rule 114B, such as sale or purchase of motor vehicles that require registration by a registering authority, opening deposits with cooperative banks, post offices, deposits of over Rs 5 lakh in a year, cash payment for a bank draft, pay order or banker’s cheque of over Rs 50,000 in a single day, a contract for sale or purchase of unlisted securities of over Rs 1 lakh among others.
Following the demonetisation decision, tax authorities have been scrutinising high-value bank deposits to keep a check on unaccounted money and possible money laundering. Although the reporting guidelines for banks were for savings account deposits of over Rs 2.5 lakh made in scrapped currency, deposits below this threshold are also being scrutinised if they are from unexplained sources or through splitting of transactions within a group or family.
Under Rule 114E of the Income-Tax Rules, 1962, for furnishing Statement of Financial Transactions (SFT), which came into effect from April 1, 2016, a person is required to furnish a statement on transactions involving receipt of cash exceeding Rs 2 lakh for sale of goods or service.
The ministry had earlier clarified that businesses and traders receiving cash exceeding Rs 2 lakh in any single transaction of sale of goods and services are required to report it to the authorities.
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