In a bid to curtail domestic black money flow, the finance ministry on Dec 15 announced mandatory furnishing of permanent account number (PAN) for all transactions above Rs 2 lakh through all payment modes with effect from January 1, 2016. This is a relaxation from an proposal to make PAN mandatory for sale and purchase of items above Rs 1 lakh. Accepting the recommendations of the special investigation team on black money, finance minister Arun Jaitley had in the 2015-16 Budget proposed to make PAN details mandatory for all sale and purchase of Rs 1 lakh and above. However, it met with resistance from trade and industry associations that argued the lower limit would affect business. Besides, the ministry rationalised monetary limits for certain transactions requiring mandatory quoting of PAN.

Background:-

• The monetary limits for sale or purchase of immovable property has been raised from Rs 5 lakh to Rs 10 lakh, and that for hotel / restaurant bills raised from Rs 25,000 to Rs 50,000.
• Sale or purchase of shares of an unlisted company has been raised from Rs 50,000 to Rs 1 lakh.
• In line with the government’s thrust on financial inclusion, opening of a no-frills bank account such as Jan Dhan will not require PAN.
• The requirement of PAN applies to opening of all bank accounts including in co-operative banks .Installation of cellphone and telephone connections will not require quotation of PAN anymore.

The government had provided a three-month compliance window that ended on September 30 to target black money stashed abroad; it saw declarations worth only Rs 4,147 crore.