Transactions of more than Rs 2 lakh would require payer’s PAN from January 1

As per a notification issued by the Indian government, any transaction of over Rs 2 lakhs would require the Permanent Account Number (PAN) of the persons involved, irrespective of the payment mode.

This step has been taken to make the budget proposal effective and to check the domestic black money. The rules for PAN requirement for other transactions have been modified as well.

Earlier, for the sale or purchase of immovable property, the monetary limits for quoting PAN was Rs 5 lakh, which has been raised to Rs 10 lakh. In case of one-time payment of hotel or restaurant bills, the limit has been raised to Rs 50,000 from Rs 25,000. For purchase or sale of shares of an unlisted company, the limit of Rs 50,000 has been raised to Rs 1 lakh.

"Quoting of PAN is being made mandatory for any purchase or sale exceeding the value of Rs1 lakh," Finance Minister Arun Jaitley had said in his budget speech.

"Considering the representations, it has been decided that quoting of PAN will be required for transactions of an amount exceeding Rs.2 lakh regardless of the mode of payment," a statement from Finance Ministry read.

The statement also said that people who do not hold PAN cards would be required to fill a form and furnish any one of the specified documents so that their identity can be established.

These new rules will be effective from January 1, 2016.

"The above 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," the statement said.

Image source