In a bid to curtail domestic black money flow, the finance ministry announced mandatory furnishing of permanent account number (PAN) for all transactions above Rs 2 lakh through all payment modes with effect from January 1, 2016. This is a relaxation from a proposal to make PAN mandatory for sale and purchase of items above Rs 1 lakh.
Accepting the recommendations of the special investigation team on black money, finance minister Arun Jaitley had in the 2015-16 Budgets proposed to make PAN details mandatory for all sales and purchase of Rs 1 lakh and above. However, it met with resistance from trade and industry associations that argued the lower limit would affect business.
“The government has received numerous representations from various quarters regarding the burden of compliance this proposal will entail. Considering the representations, PAN will be required for transactions of an amount exceeding Rs 2 lakh regardless of the mode of payment,” Central Board of Direct Taxes (CBDT) said in a statement.
Besides, the ministry rationalised monetary limits for certain transactions requiring mandatory quoting of PAN. The monetary limit for sale or purchase of immovable property has been raised from Rs 5 lakh to Rs 10 lakh, and that for hotel / restaurant bills rose from Rs 25,000 to Rs 50,000. Sale or purchase of shares of an unlisted company has been raised from Rs 50,000 to Rs 1 lakh.
From Jan 1, PAN mandatory for transactions above Rs 2 lakh In line with the government’s thrust on financial inclusion, opening of a no-frills bank account such as Jan Dhan will not require PAN. The requirement of PAN applies to opening of all bank accounts including in co-operative banks.
Installation of cell phone and telephone connections will not require quotation of PAN anymore. In a Facebook post in October, finance minister Arun Jaitley had said that a bulk of black money was still within India, and there was a need to change the national attitude so that plastic currency becomes the norm and cash an exception. “The government is working with various authorities to incentivise this change,” he had said.
The government had provided a three-month compliance window that ended on September 30 to target black money stashed abroad; it saw declarations worth only Rs 4,147 crore.