Transactions above Rs. 2 lakh need PAN from January 1 to curb black money

Finance Minister Arun Jaitely

Finance Minister Arun Jaitely

The government has made it mandatory to quote PAN (permanent account number) for all transactions in excess of Rs.2 lakh, regardless of the mode of payment, to curb black money.

The new rule, effective from January 1, will cover purchases of all goods or services, such as say gold jewellery or furniture, Revenue Secretary, Hasmukh Adhia told reporters. This includes all payments made through cash, cheques or debit or credit cards. In the case of immovable property, where quoting PAN is currently required for transactions of Rs.5 lakh, the government has decided to raise the monetary limits to Rs.10 lakh. It raised the monetary limit to Rs.50,000 from Rs.25,000 in the case of hotel or restaurant bills paid at any one time, and for bills on account of overseas travel. The limit is being raised to Rs.1 lakh from Rs.50,000 for purchase or sale of shares of an unlisted company.

Opening of a no-frills bank account, such as a Jan Dhan account, will not require PAN, he said. Other than that, the requirement of PAN applies to opening of all bank accounts including the co-operative banks. Those who do not hold PAN would have to fill a form and furnish any one of a specified list of documents to establish their identity, according to press statement.

One of the recommendations of the Special Investigation Team on black money was to make PAN compulsory for all sales and purchases of goods and services above one lakh. Union Finance Minister Arun Jaitley had accepted this recommendation and announced in his Budget speech earlier this year that it will be notified. The government hopes to reduce the limit to Rs.1 lakh eventually and then make quoting PAN mandatory for all cash transactions.

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Printable version | Aug 20, 2022 9:05:03 am |