PAN made mandatory for all transactions above Rs2 lakh
16 December 2015
The government has made quoting of PAN mandatory for cash payment made to settle hotel bills or for buying foreign travel tickets of Rs50,000 as part of the government's ongoing efforts to check generation of domestic black money.
Beginning 1 January, quoting PAN will be mandatory for all transactions of an amount exceeding Rs2 lakh regardless of the mode of payment, revenue secretary Hasmukh Adhia said on Tuesday.
The new norms are based on the recommendations of the Special Investigation Team (SIT) on Black Money that quoting of PAN should be made mandatory for all sales and purchases of goods and services where the payment exceeds Rs1 lakh.
While the finance minister made an announcement on the acceptance of the recommendations, the government said in order to bring a balance between the burden of compliance on legitimate transactions and the need to capture information relating to transactions of higher value, it decided to keep the base at a higher level.
The PAN requirement for all non-luxury cash transactions will be Rs2 lakh. Currently, it is required for transaction of Rs5 lakh and above.
PAN will also be mandatory on purchase of immovable property of Rs10 lakh.
The monetary limits have now been raised to Rs 10 lakh from Rs5 lakh for sale or purchase of immovable property, to Rs50,000 from Rs25,000 in the case of hotel or restaurant bills paid at any one time, and to Rs1 lakh from Rs50,000 for purchase or sale of shares of an unlisted company.
In keeping with the government's thrust on financial inclusion, opening of a no-frills bank account such as a Jan Dhan Account will not require PAN. The requirement of furnishing PAN for making deposits of over Rs50,000 in post office saving accounts has also been dispensed with.
Other than that, the requirement of PAN applies to opening of all bank accounts including in co-operative banks.
These changes in the rules are expected to be useful in widening the tax net by non-intrusive methods. They are also expected to help in curbing black money and move towards a cashless economy, a finance ministry release stated.