Cash Transaction Limit and PAN Card Requirement
Permanent Account Number (PAN) is a unique code present on the card which acts as identity card of Indians and it’s a proof that you pay tax and contribute in increasing the economy of the country. It contains 10-character alpha-numeric code issued to everyone including the judicial authority of India and that code is different for each and every individual. These cards are issued by The Indian Income TAX Department.
Like the Aadhaar cards, voter ID card and Driving License, it is also issued to each and every citizen of India and valid as a national identity card of the citizen. The PAN card is mandatory for a majority of business transactions as it involves the transactions of large amount from one company to another or from one person’s account to another and now it is compulsory for opening a bank account. PAN is not affected by change of address.
The main purpose of the PAN is to provide a universal identity to all financial transactions so that the government could keep the record of all monetary transactions, especially those which can affect the economy.
The Government of India makes some rules and regulation to stop the flow of black capital and people who hide themselves from paying tax to the government which in return is used for the benefits of the masses. So, to keep an eye on the people and to gather information of various transactions taken place from third party it is mandatory to use the PAN card whenever necessary.
According to the Income tax rules if a transaction exceed the specific limit set by the government then the person have to show his/her pan card where a 10 digit number is given without which a transaction will not proceed further.
A team was setup and after the investigation and recommendation of that team PAN made mandatory for all sales and purchases of goods by the individuals whose payment exceed from Rs. 1 Lakh, it is when the PAN becomes mandatory for the first time.
Amendment of PAN Card number requirement for the following activities:
|Immovable property purchase/sale value rises from Rs.5 Lakh to 10 Lakh.|
|In case of hotels and restaurants the value increases from Rs. 25,000 to 50,000.|
|If you are buying a four wheeler then the PAN ID is needed if the value exceeds 50,000.|
|Deposits with the Co-op banks, NBFC companies, Nidhi, Post Office will also need PAN ID and if the deposit is of more than Rs. 1 Lakh during a year then also you need a PAN.|
|Deposit with the PO Savings Bank above Rs.50,000 is discontinued and installation of cellphone connections also discontinued.|
|PAN is needed if hotel and restaurant bills exceeding Rs. 25,000.|
|Credit card Application to banking companies or any other companies or organizations – No change.|
|Sale or Purchase of unlisted company’s share for a sum going over Rs.1 Lakh for each transaction.|
|Debentures/ bonds Payment of Rs. 50,000 or over to an institution or company for obtaining its bonds/ debentures|
|Payment of Rs. Over 50,000/- to Reserve Bank of India for obtaining its bonds Payment exceeds Rs.50,000/-.|
|premium of Life insurance – payment of over Rs. 50,000 in 12 months as the premium to a person|
|Purchase of bullion or jewellery – Payment of over Rs.5 Lakh at one time against the bill.|
|Sales or Purchases of services or goods – exceeding Rs.2 Lakh every transaction.|
All the changes that are being made are for the benefits of citizens and are expected to be useful in getting black money back in our country which can be further used for the development purpose and changes will be included from January 2016.