PAN is mandatory to deposit Rs 2000 notes above this amount in bank account These include opening of bank account, demat account, FD deposit, depositing cash above the specified threshold
The Reserve Bank of India (RBI) has withdrawn Rs 2000 notes from circulation. Individuals holding Rs 2000 notes can now either exchange them for other denomination notes from a bank or deposit the same into their bank accounts. However, if you deposit more than Rs 50,000 in a single transaction, then you have to mandatorily quote your PAN as per income tax rules.Rule 114B of the income tax rules makes it mandatory for an individual to quote his/her PAN if the cash deposit in a single day either with a bank or post office exceeds Rs 50,000 in a single day. However, quoting PAN is not mandatory if the amount deposited does not exceed Rs 50,000 in a single day.
Here is an example to understand this. Suppose, you make a cash deposit of Rs 30,000 in Rs 2000 banknotes into your bank account. And 15 days later, you make another cash deposit of Rs 40,000 in Rs 2000 banknotes into that same bank account. As the single transaction in a day does not cross Rs 50,000, you will have to quote PAN while making a cash deposit of Rs 2000 notes. However, if you had made a single cash deposit of Rs 70,000 (Rs 30,000 + Rs 40,000) in a single day, then the bank will ask you to quote your PAN mandatorily at the time of making the cash deposit.
The government has made the quoting of PAN or Aadhaar mandatory if the cash deposits or withdrawals in a financial year exceed Rs 20 lakh. The notification was issued by the Central Board of Direct Taxes (CBDT) on May 10, 2022, and the new rules became effective from May 26, 2022.
Along with depositing, an individual also has the option to exchange Rs 2000 notes. However, the RBI has put a limit on the number of notes that can be exchanged. As per the RBI notification, an individual can exchange a maximum of 10 notes or Rs 20,000 at a time. In a media interaction on May 22, 2023, the RBI governor said that banks will follow their own process and rules in case of an exchange of Rs 2,000 notes.
However, there is no limit on the amount of deposits that can be made in the bank account. The KYC rules will be applicable in case of deposits.
The last date to deposit or exchange Rs 2000 note is September 30, 2023. The central bank has taken the decision to withdraw Rs 2000 notes from circulation as a part of its clean money policy while maintaining that Rs 2000 note continues to be a legal tender.
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This story originally appeared on: India Times - Author:Faqs of Insurances
