PAN soon to be mandatory for cash transactions above Rs 2 lakh

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.

In 2015-16 Budget, the Fund Minister had suggested producing pricing of Lasting Account Number (POT) necessary for several purchase and get of over Rs-1 lakh.

Quoting PAN numbers is already necessary for expenditure of Rs 50,000 and more in some transactions, like buying or selling shares of an unlisted company or immovable property.

In case an investor or buyer is purchasing gold or bullion above Rs 2 lakh, then PAN Card would be mandatory.

During the Union budget, Arun Jaitley had proposed that all transactions above Rs 1 lakh would need PAN Card as a mandatory requirement. PAN will, however, not be required for opening bank accounts under Jan Dhan Yojana. The Rs 2-lakh limit for disclosure of PAN is an interim measure and ultimate goal is to lower it Rs 1 lakh, he added.

In a step towards curbing the menace of domestic black money, the government has made it mandatory for cash transactions of Rs.2,00,000 and above to now require submission of the income tax Permanent Account Number (PAN), parliament was told on Tuesday. “Quite briefly we will place the notice that should you offer in money greater than Rs 2 lakh, a SKILLET quantity would not be unnecessary”, he explained responding to discussion on Extra Requirements for Awards within the Lok Sabha.

The relief also includes discontinuation of requirement of PAN for installation of basic landline or cellphone connection.

The changes to the rules will take effect from 1st January, 2016.

PAN will now be mandatory to open all bank accounts including co-operative banks. The monetary limit for filing appeals by revenue department in tax cases has been raised to Rs 10 lakh in an appellate tribunal and Rs 20 lakh in high courts. “Persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity”, said an official release.

“These changes are expected to be useful in widening the tax net by non-intrusive methods”, CBDT stated.