Pan-Less Bank Deposits: How Much?

In India, individuals can deposit up to ₹50,000 into their savings account without furnishing their PAN card details. However, if the amount exceeds ₹50,000, PAN card details are mandatory. The cash deposit limit per day, per transaction, and per person is ₹2 lakhs. The limit for cash deposits in a savings account per financial year is ₹10 lakhs, and transactions exceeding this limit will be reported to the Income Tax authorities.

Deposits under ₹50,000 don't require a PAN card

Deposits under ₹50,000 in India do not require a PAN card. According to the Reserve Bank of India (RBI) guidelines, you can deposit up to ₹50,000 into your savings account without furnishing your PAN card details. However, if you want to deposit more than this amount, you will need to provide your PAN card information. The cash limit per day, per transaction, and from one person is ₹2 lakhs.

The cash deposit limit in a savings account per financial year is set at ₹10 lakhs. Your bank will report transactions exceeding this limit to the Income Tax authorities. Depositing more than this amount can trigger a notification from the Income Tax Department to examine your transactions, although these amounts are not subject to direct taxation.

If you are unable to verify the source of funds, the Income Tax Department can impose a 60% tax, a 25% surcharge, and a 4% cess on the deposited amount under Section 68 of the Income Tax Act. The government has made these measures mandatory to prevent tax evasion and curb black money in the economy.

It is important to note that the PAN card requirement for cash deposits above ₹50,000 applies to all bank accounts of an individual. This rule was implemented to prevent people from making multiple cash deposits in different bank accounts without quoting their PAN.

Additionally, if you are depositing more than ₹50,000 in cash, you can use your Aadhaar card instead of a PAN card for identification purposes.

PAN card is mandatory for deposits over ₹50,000

The Permanent Account Number (PAN) card is a crucial document in India, serving as a mandatory requirement for various financial transactions. One of the critical functions of the PAN card is its role in cash deposits and withdrawals in banks and post offices.

As per the guidelines issued by the Reserve Bank of India (RBI), individuals can deposit up to ₹50,000 into their savings accounts without providing their PAN card details. However, for deposits exceeding this amount, furnishing PAN card information becomes mandatory. This measure ensures transparency and helps curb unaccounted financial transactions through the cash route.

The requirement to quote the PAN card for deposits over ₹50,000 extends to various financial institutions, including banks, cooperative banks, and post offices. It is important to note that this rule applies to the aggregate of all deposits made in a single day. Therefore, even if an individual makes multiple deposits throughout the day that collectively exceed ₹50,000, they must provide their PAN card details.

The PAN card is also essential for other high-value transactions, such as opening a bank account, applying for a debit or credit card, purchasing mutual funds or bonds, and making payments for foreign travel or currency exceeding ₹50,000. These measures are implemented by the Income Tax department to monitor cash deposits and prevent tax evasion.

In certain cases, if an individual does not possess a PAN card, they can utilise their Aadhaar card number or sign Form 60 as an alternative. Form 60 is a declaration stating that the individual does not hold a PAN card, and their income is below the taxable limit. However, it is important to note that not providing PAN or Aadhaar details for transactions where they are mandatory can lead to penalties and legal consequences.

Banks may not accept cash deposits without PAN details

Banks in India may not accept cash deposits without PAN details. The Permanent Account Number (PAN) is a crucial piece of identification in India, and its use is mandated by the Central Board of Direct Taxes (CBDT) for various financial transactions, including cash deposits and withdrawals.

The requirement to furnish PAN details for cash deposits is primarily driven by the need to curb tax evasion and maintain financial transparency. According to the Income Tax Act, 1962, and subsequent notifications from the CBDT, the disclosure of PAN is essential for specific high-value transactions. This includes depositing or withdrawing cash exceeding certain thresholds.

The specific rules regarding cash deposits and PAN requirements are as follows:

• Deposits under ₹50,000: For cash deposits below ₹50,000, providing PAN card details to the bank is generally not necessary. However, if the cumulative deposits in a financial year exceed ₹2.5 lakhs for general citizens or ₹5 lakhs for senior citizens, the Income Tax Department may consider it a large deposit and request information about the source of income.
• Deposits exceeding ₹50,000: When depositing an amount of ₹50,000 or more in cash, individuals must furnish their PAN card details to the bank. This requirement is in line with Section 114B of the Income Tax Act, 1962, and the CBDT's amendments to the Income Tax Rules.
• High-value deposits: As per the new PAN rule, cash deposits or withdrawals exceeding ₹20 lakhs in aggregate across one or more bank accounts or post office accounts in a financial year require the mandatory quoting of PAN or Aadhaar. This rule also applies to deposits and withdrawals from cooperative banks.
• Current and cash credit accounts: When opening a current account or cash credit account with a bank or post office, individuals must quote their PAN. This requirement is in addition to the need to provide PAN details for deposits over ₹50,000 made in a single day.

It is important to note that these rules are subject to change, and individuals should refer to the latest guidelines provided by the CBDT and the Income Tax Department. Non-compliance with PAN requirements may result in penalties and tax implications.

TDS is cut at 20% for fixed deposits over ₹10,000 without PAN

In India, the cash deposit limit in a savings account per day is ₹1 lakh. However, you can deposit up to ₹2.5 lakhs in a day, but not too often. The cash deposit limit in a savings account per financial year is ₹10 lakhs. Depositing more than this amount may trigger a notification from the Income Tax Department to examine your transactions.

If you are depositing more than ₹50,000, you will need to provide your PAN card details. If you do not have a PAN card, you can declare the particulars of the deposit in Form 60.

If you deposit more than ₹10,000 without a PAN card, a 20% TDS (Tax Deducted at Source) will be cut. TDS is income tax reduced from the money paid at the time of making specified payments such as rent, commission, professional fees, salary, interest, etc. TDS is usually deducted by the payer and must be deposited with the government by the 7th of the subsequent month.

For fixed deposits, TDS is calculated based on the interest earned, not the principal amount. The rate of TDS depends on the type of deposit. For regular FDs, a TDS of 10% is applicable if the annual income from FD interest exceeds ₹40,000 for regular citizens and ₹50,000 for senior citizens. If PAN details are not provided, this rate increases to 20%.

If you have a total income of less than ₹2.5 lakhs in a financial year, you can submit Form 15G or Form 15H to claim exemption from TDS.

Cash deposits are monitored by the Income Tax department

If you deposit more than ₹50,000, you will have to show your PAN card details if you haven't already provided them to the bank. If you don't have a PAN card, you can declare the particulars of the deposit in Form 60. If you are unable to explain the origin of the income, the Income Tax Department, under Section 68 of the Income Tax Act, can impose a 60% tax, plus a 25% surcharge, and a 4% cess on the deposited amount.

The cash deposit limit per day is ₹1 lakh. However, you can deposit up to ₹2.5 lakh in a day as long as you don't do it too often. The cash deposit limit per financial year is ₹10 lakh, and you must not cross that amount. If you deposit more than that amount, the IT department may be notified.

Banks are required to report excess transactions to the Income Tax Department. The IT department will contact you through email or SMS to furnish details about the source of income.

Frequently asked questions