**Summary:**
This circular, RBI201617135 DCM Plg No.128710.27.00201617, issued by the Reserve Bank of India (RBI) on November 16, 2016, addresses compliance with provision 114B of the Income Tax Rules, 1962, related to the withdrawal of the legal tender character of specified bank notes. The circular is directed to the Chairman, Managing Director/Chief Executive Officer of Public Sector Banks, Private Sector Banks, Foreign Banks, Regional Rural Banks, Urban Cooperative Banks, and State Cooperative Banks. It references an earlier circular, DCM Plg No.122610.27.00201617 dated November 08, 2016, on the same subject. The key directive is that banks must ensure customers depositing more than ₹50,000 in cash submit a copy of their PAN card if the bank account is not already seeded with PAN. Furthermore, banks are advised to adhere to all PAN reporting requirements as mandated by the Income Tax Rules, 1962, for other applicable transactions. Banks are instructed to ensure strict compliance with these provisions. Contact is P Vijaya Kumar, Chief General Manager.
Key Entities Referenced
Reserve Bank of India (RBI): The central bank of India, the issuing authority for the circular.
Public Sector Banks: Banks in India with majority government ownership.
Private Sector Banks: Banks in India with majority private ownership.
Foreign Banks: Banks operating in India but headquartered outside of India.
Regional Rural Banks: Regional Rural Banks (RRBs) are financial institutions in India that operate at a regional level.
Urban Cooperative Banks: Financial institutions that operate in urban areas.
State Cooperative Banks: Cooperative banks operating at the state level in India.
Income Tax Rules, 1962: The regulatory framework governing income tax in India, specifically Section 114B which mandates PAN card submission for certain transactions.
RBI/2016-17/135
DCM (Plg) No.1287/10.27.00/2016-17 November 16, 2016
The Chairman / Managing Director/Chief Executive Officer
Public Sector Banks / Private Sector Banks/ Foreign Banks
Regional Rural Banks / Urban Co-operative Banks / State Co-operative Banks
Dear Sir,
Withdrawal of Legal Tender Character of Specified Bank Notes –
Compliance with provisions of 114B of the Income Tax Rules, 1962
Please refer to our Circular DCM (Plg) No.1226/10.27.00/2016-17 dated November
08, 2016 on the captioned subject. With a view to ensure compliance with provisions
of 114B of the Income Tax Rules, 1962, the banks are advised as under:
i. Anybody depositing more than ` 50,000/- in cash in their bank account has to
submit a copy of the PAN card in case the bank account is not seeded with
PAN
ii. In addition to the above provision, in the same IT Rules, PAN reporting
requirements are there for other transactions, which banks need to insist
upon.
2. The banks are, therefore, advised to take note of the above and ensure strict
compliance with the provisions of 114B of the Income Tax Rules, 1962. Relevant
provision 114B of the Income Tax Rules, 1962, is enclosed.
Yours faithfully,
(P Vijaya Kumar)
Chief General Manager
Encl: As above