All financial transactions may require a flash of the PAN

All financial transactions may require a flash of the PAN

By siliconindia staff writer   |   Monday, 19 February 2007, 06:00 Hrs
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Mumbai/Pune: The PAN (permanent account number) may soon become compulsory for carrying out all financial transactions, the amount of investment involved notwithstanding.

According to senior officials in the government, a proposal is being considered to make PAN - a 10-digit alphanumeric number issued by the income-tax department, which each individual has to quote in his I-T return - compulsory for all investments, so that all transactions can be monitored and later matched with the tax payers returns, reported a national daily.

Officials opined that making PAN mandatory for all investments would enable IT officials to establish an audit trail, and get rid of possible tax evaders. While, all investors are income tax assesses, there are few who are out of the tax net since they do not hold a PAN.

AS per current policies, individuals need to quote their PAN in select, especially high-value financial transactions. For instance, going by Sebi's issue procedure, quoting PAN is a must for investments of Rs 50,000 and above in initial public offerings (IPOs) and mutual funds. Investors opening a fixed deposit or a post office savings account of over Rs 50,000 also need to necessarily quote their PAN.

While there is no such requirement in many of the small savings schemes, the government is considering a proposal to cover them too in the second stage of PAN-for-transactions plan.

Last year, Sebi made it mandatory for investors who have a trade order value of less than Rs 5 lakh to quote their PAN or the unique identification number obtained under the MAPIN. It is now being thought that dovetailing PAN with MAPIN will help in tracking the source of tax evaders, noted the publication.

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