Rule 161 — Transactions for purposes of section 262(9)(a). Made under s.262 of the Income-tax Act, 2025.
Rule 161 gives effect to Section 262 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
Sub-rule (1) requires every person, at the time of entering into a transaction specified in column 2 of the Table, to quote his Permanent Account Number in the documents pertaining to that transaction, and requires every person specified in column 3 who receives such a document to ensure that the number has been duly quoted and authenticated.
The Table has three entries. Entry 1 is cash deposit or deposits aggregating to twenty lakh rupees or more in a financial year in one or more accounts of a person with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 applies, including any bank or banking institution referred to in section 51 of that Act, or with a Post Office; the person who must ensure quoting is that banking company or co-operative bank, or the Post Master General referred to in section 2(j) of the Indian Post Office Act, 1898 as it existed prior to its repeal, or the Regional Head referred to in the Post Office Rules, 2024 framed under the Post Office Act, 2023. Entry 2 is the same for cash withdrawal or withdrawals aggregating to twenty lakh rupees or more in a financial year from such accounts. Entry 3 is the opening of a current account or cash credit account by a person with the same institutions.
Sub-rule (2) disapplies sub-rule (1) where the person carrying out the transaction is the Central Government, a State Government or a consular office. Sub-rule (3) disapplies it where the person carrying out a transaction at Sl. Nos. 1 to 3 is a non-resident, not being a company, or a foreign company; the transaction is entered into with an ifsc banking unit; and that non-resident or foreign company does not have any income chargeable to tax in India. Sub-rule (4) gives "ifsc banking unit" the meaning in rule 159(7)(a).
Sub-rule (5) requires the Permanent Account Number of an individual to be submitted to the Principal Director General of Income-tax (Systems), or the Director General of Income-tax (Systems), or a person authorised by either of them with the approval of the Board, for the authentication referred to in section 262. Sub-rule (6) requires the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) to lay down the formats and standards along with the procedure for authentication of the Permanent Account Number.
Section 262(9)(a) requires the Permanent Account Number to be quoted for prescribed transactions, and leaves the list of transactions to the rules. This rule draws the list and, just as importantly, puts a matching duty on the institution receiving the document, so that quoting is not left to the customer's diligence. The exclusions keep the requirement off governments and consular offices, and off a narrow class of non-residents dealing with an ifsc banking unit who have nothing chargeable in India.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Cash deposit threshold for quoting the Permanent Account Number | Twenty lakh rupees or more | Deposit or deposits aggregating in a financial year, in one or more accounts of a person with a banking company or co-operative bank or Post Office | Rule 161(1), Table Sl. No. 1 |
| Cash withdrawal threshold for quoting the Permanent Account Number | Twenty lakh rupees or more | Withdrawal or withdrawals aggregating in a financial year, in one or more accounts of a person with a banking company or co-operative bank or Post Office | Rule 161(1), Table Sl. No. 2 |
| Threshold for opening a current account or cash credit account | No monetary threshold | The Table entry applies to the opening of such an account with the listed institutions regardless of amount | Rule 161(1), Table Sl. No. 3 |
The twenty lakh rupee tests are aggregation tests, not per-transaction tests: they run on deposits or withdrawals aggregating in a financial year across one or more accounts of the same person, so a series of smaller cash movements crosses the line just as a single large one does. Deposits and withdrawals are counted separately, each against its own twenty lakh rupees. The third entry carries no amount at all, so opening a current account or cash credit account brings the requirement in from the first rupee. The duty is two-sided; the institution in column 3 has to ensure the number was duly quoted and authenticated, which is more than collecting it. The exclusion in sub-rule (3) needs all three of its conditions together, so a non-resident with any income chargeable to tax in India is outside it even when dealing with an ifsc banking unit.
An individual deposits cash of Rs 6 lakh in April, Rs 9 lakh in August and Rs 7 lakh in December into two accounts with the same bank in one financial year. The aggregate is Rs 22 lakh, above the twenty lakh rupees in Table Sl. No. 1, so the Permanent Account Number must be quoted in the documents pertaining to those transactions, and the bank must ensure it has been quoted and authenticated. Cash withdrawals by the same person in that year are tested separately against their own twenty lakh rupee threshold under Sl. No. 2.
You meet it at the counter and in the account-opening or deposit documentation of a bank, co-operative bank or Post Office, where the Permanent Account Number is asked for and authenticated before the transaction is put through.
every person shall, at the time of entering into a transaction specified in column 2 of the following Table, quote his Permanent Account Number in documents pertaining to such transaction
every person specified in column (3) of the said Table, who receives such document, shall ensure that the said number has been duly quoted and authenticated