PAN to check tax evasion in India

By Vipin Agnihotri

Permanent Account Number (PAN) is fast emerging as a tool for Income Tax department in India to check tax evasions. There are many transactions where quoting of PAN has been made mandatory. And number of economic activities requiring mention of the same is expected to go up.

“These transactions have been added over from time to time and there is always a possibility that new activity will be brought in the fold. PAN is a means to make transactions transparent. It has made the work of the department more focused and made easy zeroing in on people in case of discrepancies,” pointed out Anjani Kumar, Income Tax Commissioner in an exclusive interview with The Indian Street.

Quoting of PAN is essential while buying or selling an immovable property with a value pegged at Rs five lakh and more. Same holds true for sale and purchase of vehicles, as defined in Clause 28 of Section 2 of the Motor Vehicles Act. It, however, does not over two wheelers.

Depositing money also needs a PAN be it a time deposit, exceeding Rs 50,000 with a banking company covered under Banking Regulation Act or a deposit of more than Rs 50,000 in post office savings bank. Payment and deposit in cash exceeding Rs 50,000 and contract of more than a lakh rupees for sale or purchase of securities as defined in Securities Contracts (regulation) needs PAN as well.

Besides, opening an account or applying for credit card with a banking company, applying for telephone connection, paying hotel and restaurants’ bills exceeding Rs 25,000 and paying more than Rs 25,000 for foreign travel also necessitates quoting of PAN.

Apart from this, payment of Rs 50,000 or more- to a mutual fund for purchase of its units, to a company for acquiring shares issued by it, to a company or an institution for acquiring debentures or bonds issued by it or to RBI for acquiring bonds issued by it needs mention of PAN.

“If, somehow, a person does not talk of PAN but successfully transacts, he/she has strict punishment under IT act. And we came to know of same through our central information commission that has annual reports from all dealers, contractors and others involved in economic transactions,” added Kumar.

In case a person does not have a taxable income and hence no PAN, there are forms wherein a person can declare the particulars of transaction specified above. Similarly, minors can quote PAN of parents or guardian. For all those indulging in transaction of any sort involving money, there is no escaping PAN; its need is ever increasing. And happily, getting it is not difficult, given one furnishes the required document relevant to one’s identity and proof of residence and deposits a nominal fee.