In order to check the number of unaccounted financial transactions happening in the country the finance ministry is now planning to bring more transactions under the ambit of the already existing list of financial transactions where-in quoting of permanent account number (PAN) is compulsory.
Apart from keeping a tab on the unaccounted income, these transactions will further help the Income Tax Department strengthen its data base and help increase tax compliance. An official at the finance ministry stated that “rules are being changed with regard to PAN requirement in cash transactions to track the investment pattern of high net worth individuals”. He said the same was aimed at ‘curbing black money transactions’.
Some of the transaction that are expected to be added to list are, sale and purchase of bullion or jewellery involving cash transfer of Rs 5 lakh or more; cash payment of Rs 1 lakh or more as life insurance premium ; and also changes are expected to be brought about in the limits for cash payment for foreign travel. At present, the cap is Rs 25,000, including fare, the fee of a travel agent/tour operator and purchase of foreign currency.
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