PAN is now mandatory for all savings accounts
In a circular dated 15 December 2016, the Reserve Bank of India (RBI) put restrictions on some of the banking transactions where PAN or Form No. 60 was not available
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According to a press release issued on 8 January, the Central Board of Direct Taxes (CBDT) has amended the income-tax rules and asked all banks to link the Permanent Account Number (PAN) or Form No. 60 (where PAN is not available) to all existing bank accounts by 28 February 2017, if not done already. However, the ‘Basic Savings Bank Deposit Accounts’ (BSBDA) are excluded from the necessary compliance norms of this rule.
BSBDA are small bank account and they are subjected to various limitations. For instance: total credits in such accounts should not exceed Rs1 lakh in a year, the maximum balance in the account should not exceed Rs50,000 at any time and the total withdrawals (cash or transfers) should not exceed Rs10,000 in a month.
If you have not yet provided PAN or Form No. 60 for your bank account, do so at the earliest to avoid unnecessary hassles later.
Post-demonetization, several amendments were made to track black money making its way into the banking system. In this regard, the know-your-customer (KYC) norms were made stringent.
In a circular dated 15 December 2016, the Reserve Bank of India (RBI) put restrictions on some of the banking transactions where PAN or Form No. 60 was not available. In the circular, the RBI stated that, “No debit transaction, transfer or otherwise shall be allowed in accounts which do not comply with the KYC norms.”
To begin with, these rules were made applicable to accounts where both the thresholds were reached: balance of Rs5 lakh or more; and the total deposits (including credits by electronic or other means) made after 9 November 2016, exceeded Rs2 lakh. Taking it further, now CBDT has amended the tax rules, and provided a deadline of 28 February to update PAN or Forms No. 60 in all the savings accounts, which are held with a bank or a post office.
Besides that, the latest circular of CBDT also mandates banks and post offices to submit information in respect of cash deposited in savings accounts between 1 April 2016 and 8 November 2016, in accounts where the cash deposits between 9 November 2016 and 30 December 2016 exceeded the specified limits, .i.e., Rs2.5 lakh.
Form No. 60 and PAN
Form No. 60, which can be used in place of PAN, can be downloaded from the website of scheduled banks or the post office. These are also available at the branches of banks and post offices. Form No. 60 is a self-declaration form, where a person not having a PAN declares that she does not have a PAN card.
After this declaration, the account holder can do transactions in cash, such as depositing or withdrawing money from the account. A person furnishing the Form No. 60 needs to mention details such as: address along with a valid address proof, status of income tax assessment, and reason for not having a PAN.
Though you can provide Form No. 60 instead of PAN to comply with the rules, it is better to get a PAN. Obtaining a PAN has been made easy by enabling the online application process.
Online applications can be made either through the portal of NSDL (http://tin.tin.nsdl.com/pan/index.html) or the portal of UTITSL (http://www.myutiitsl.com/PANONLINE/). The application form has been enabled with digital signature certificate (DSC) and Aadhaar based e-signature. Aadhaar can also serve as proof of identity, address and date of birth.
After filling up the online application, an individual has to upload the scanned image of her photograph and the Aadhaar card as per the specifications on the website. The application fee is Rs107, including service tax, for a person residing in India and Rs994 for those with an overseas address.
Online payment of application fees can be made through credit cards, debit cards or Net-banking, and there will be a small charge on this transaction.
At present, the facility for dispatch of PAN cards outside India is available for select countries only. Applicants from other countries may contact their local service provider before applying for the same.