In an effort to curb black money transactions, the finance ministry has made it mandatory to furnish permanent account number (PAN) for transactions above Rs 2 lakh made through any mode. The implementation comes as a relief over the earlier recommendation as per the limit was set at Rs 1 lakh. The new rule came into effect from January 1, 2016.
Here is a brief description as how the new rule with impact various transactions.
Any bank account or deposits opened with a bank branch will now need to have PAN. Only those bank accounts, which are opened under the Pradhan Mantri Jan Dhan Yojana are exempted from such mandate.
The limit of Rs 2,00,000 will not be applicable for purchase of prepaid cards as PAN needs to be quoted for any prepaid card purchase above Rs 50,000 in a year.
The earlier limit of Rs 5 lakh applicable on the purchase of gold jewellery has now been revised to Rs 2 lakh now.
The limit over which PAN will be required in real estate transactions is raised to Rs 10 lakh from Rs 5 lakh.
If any restaurant or hotel bill is paid in cash for an amount over Rs 50,000 will require submission of PAN details. Also, foreign travel or purchase of forex beyond Rs 50,000 has to be backed by PAN details. This limit has been raised from the earlier limit of Rs 25,000.
The ministry has also revised the limit for submission of PAN during the sale or purchase of stocks of the unlisted company, which is now raised to Rs 1 lakh from Rs 50,000.
Cellphone or telephone:
The government has done away with the requirement of submitting PAN for the installation of telephone or cell phone.
Goods and services:
While previously the sale or purchase of goods or services did not require PAN. But, as per the new rule, any purchase or sale beyond Rs 2,00,000 should be accompanied with the furnishing of PAN.