New Delhi: Recently, the Central Board of Direct Taxes (CBDT) issued a notification making it mandatory to quote either PAN or Aadhaar for depositing or withdrawing over Rs 20 lakh in a financial year.
It has been made mandatory to bring more transparency to financial transactions as banks, post offices, and co-operative societies would be required to report the transactions of deposits and withdrawals aggregating to Rs 20 lakh or more in a financial year.
The quoting of PAN or Aadhaar will also help authorities in tracing the movement of cash in the system.
It is seen as another attempt to increase the taxpayer base by bringing people who are doing high-value transitions into the tax net.
Currently, bank customers need to furnish PAN for depositing Rs. 50, 000 or more per day. However, the new rule set a threshold for the full financial year.
From May 26, banks, post offices, and co-operative banks have to report deposits and withdrawals aggregating to Rs. 20 lakh or more in a financial year.
The new rules also made quoting of PAN or Aadhaar mandatory for opening a current account.
Direct tax revenue increased in 2021-22
As per Union Finance Ministry, tax revenue in the financial year that ended on March 31, 2022, rose to Rs 27.07 lakh crore. It is 34 percent higher than Rs 20.27 lakh crore recorded in 2020-21.
During the financial year, revenue from direct taxes increased by 49 percent whereas, collection from indirect taxes grew by 20 percent year on year.
Tax-GDP ratio was also the highest in the financial year. The direct tax to GDP ratio was 6.1 percent whereas, the indirect tax to GDP ratio was 5.6 percent.