Significant Changes in Income Tax regulations on Cash Deposit.
- There are some important income tax laws are applicable since 1 July and we need to made it clear in our mind while filing Income Tax Return.
- The union budget 2022 includes three significant changes in Income Tax Rules are from effect from 1 July. This recent modification should be known to every taxpayer.
Aadhaar - PAN-Non- Linking Late Fee Applicable:
- The last date for Aadhaar-PAN linkage June 30. CBDT said that anyone who neglected to link Aadhaar with PAN will henceforth be subject to a INR 1,000 fine.
- The increased late fee will apply with effect from July 1 2022. PAN & Aadhaar linkage was formerly permitted by the CBDT between March 31 and June 30 with a late fine of INR 500/-.
- The Aadhaar & PAN linking, cryptocurrency investments, and the advantages received by the and social media influencers & medical professionals like Doctors, are the three major improvements.
- The late cost for Aadhaar & PAN linking has gone up, while doctors and Social media influencers will both be required to pay an additional 10% TDS on the profits they earn from sales promotions, under revisions made to Income Tax Rules. Investment made in cryptocurrencies will also be subject to a TDS at 1%.
- To combat black money, the government has imposed a number of restrictions on cash transactions. We should be aware of all the monetary transactions that could result to penalties.
- If cash deposits and withdrawals total more so than Rs 20 lakh in a financial year, you must mention your PAN and Aadhaar number. While opening a current account or a cash credit account with a bank, a post office, or a cooperative bank, individuals must also provide their PAN or Aadhaar card number. This new regulation was issued by the Central Board of Direct Taxes (CBDT) in a notification that was released earlier this month.
- “Earlier no cumulative limit existed for cash deposit in accounts on an annual basis, presently this has been set at Rs 20 lakh on an annual aggregate basis. These transactions will leave a trail for the income tax authorities thanks to the PAN linkage. Cash withdrawals are now subject to additional restrictions, which weren't there before. The rules implementation have intent to decrease & maintain the proper track cash transactions"
- For deposits of Rs. 20 lakh or more in a fiscal year, the Permanent Account Number (PAN) or Aadhaar must be mentioned. The new regulation will apply to post offices, cooperative societies, as well as bank accounts and bank accounts.
- Taxpayers have to provide their PAN and Aadhaar data to create cash withdrawals of Rs. 20 lakh or more from one or more bank accounts with banks or post offices. This action will stop unreported financial transactions using cash, according the release.
- For cash deposits to bank accounts that exceeded Rs 50,000 in a single day, PAN must be mentioned. The Income Tax authorities did not impose an annual limit
- Along with accounts in private and public sector banks, the finance ministry changed the rule to cover cash deposits and withdrawals for the accounts in post offices or cooperative banks.
- Anyone participating in such transactions must apply for a PAN at least 7 days before the date of the transactions in consideration.
- Bank and post office employees are expected to properly authenticate any PAN or Aadhaar number that taxpayers provide while conducting transactions or opening new accounts. According the notification's requirements, the tax authorities must obtain the demographic or biometric details.
- “This new Income tax rules has been made Income tax regulation stronger & more difficult to ignore. The compulsory requirement of taking Aadhaar or PAN for withdrawals or deposit would support the govt in tracing the Cash movement in the Indian financial system. Besides current provision of TDS deduction U/s 194N of the Income-tax Act, 1961, these rules are expected to more tighten the loopholes,"- Said by Swatantra Kumar singh Partner Rajput Jain and Associates