Now PAN card might be compulsory for all bank transaction

Another step to curb black money transactions. In
another step to keep closer tabs on financial transactions and curb black money
transactions, the government is planning to make quoting the permanent account
number (PAN) mandatory for all transactions carried out by customers with their
banks and insurance companies. Currently, quoting the PAN is not
mandatory for opening a bank account or buying an insurance policy. Cash
deposits of below Rs 50,000 at banks do not require the PAN to be quoted
either. This threshold limit will also be done away with once the
government implements the new measures. In addition, existing bank
account-holders will need to quote PANs. “The notification to make PAN
mandatory for all bank and insurance customers will come before December 31
this year,” said a finance ministry official, requesting anonymity. India has about
500 million bank accounts and roughly 54 million PANs have been issued. As
recently as July 2 this year, the government made PAN disclosure mandatory for
all security market participants, including mutual fund investors, of any size.
Quoting this alpha-numeric number is already mandatory for a host of
transactions, including on return of income and all correspondence with any income
tax authority. It is also compulsory to quote PAN in all documents
pertaining to financial transactions, including sale and purchase of immovable
property (Rs 5 lakh and above) or payments in cash of amounts exceeding Rs
25,000 to hotels and restaurants. Likewise, PAN has to be mentioned for
making a time deposit exceeding Rs 50,000 with a bank or post office. Anyone
who pays an insurance premium of Rs 50,000 needs to quote the PAN. The
new measures will also remove any bias people may have towards a financial
product by making PAN mandatory for nearly all major financial transactions.
Even as the scope of PAN requirement is being extended, the Association
of Mutual Funds in India
has been lobbying the government to scrap the PAN requirement imposed on mutual
fund transactions, saying the industry is suffering as a result.