Govt to make PAN mandatory for cash transactions beyond a limit

news
05 October 2015

The government plans to make it mandatory to furnish details of income tax Permanent Account Number (PAN) for cash transactions beyond a certain threshold, as part of its efforts to check generation of black money, finance minister Arum Jailed said.

''The government is at an advanced stage in considering the requirement of furnishing PAN card details if cash transactions beyond a certain limit are undertaken,'' Jailed said in a Face book post.

Noting that the bulk of black money is still within the country, Jailed said there was also a need to reduce the use of cash and make plastic currency the norm in order to check tax evasion.

"The bulk of black money is still within India. The campaign against domestic black money has to be separately dealt with for which government is independently taking steps," he said.

Towards this, the income tax department has strengthened its capacity to access information and apply technology driven analytical tools to expose evasion, he said.

''Its ability to detect large cash withdrawals, or large cash transactions which enter the system, is being strengthened. GST regime once introduced will also be a landmark step in this direction.

''Thus for commodities like gold where the initial purchase by the exporter is after the payment of custom duty, the subsequent transactions which are mostly in cash, can easily be found out,'' Jailed said.

The finance minister had, in the 2015-16 budgets, proposed quoting of PAN mandatory for all sale and purchase of over Rs1 lakh.

''Quoting of PAN is being made mandatory for any purchase or sale exceeding the value of Rs1 laky. The third party reporting entities would be required to furnish information about foreign currency sales and cross border transactions,'' Jailed had said.

Thereafter, the government had received representations from various persons, including MPs, MLAs, and trade and industry associations among others, against the proposed mandatory quoting of PAN for sale or purchase in excess of Rs1 lakh.

"The opening of a large number of payment gateways, internet banking, payment banks and the emerging reality of e-commerce will prompt the use of banking transactions and plastic money rise significantly," Jailed said.

Meanwhile, PAN number allotment by the income tax department will remain suspended for five days beginning Monday owing to a software upgrade exercise.

"The income tax department is in the process of upgrading software applications… PAN allotment by the department will remain suspended between 5-9 Octobers due to PAN data migration activity," an official statement said.





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