After considering various representations received and inputs received from Banks, it has been decided to notify 31st March, 2018 or six months from the date of commencement of account based relationship by the client, whichever is later, as the date of submission of the Aadhaar number, and Permanent Account Number or Form 60 by the clients to the reporting entity. Necessary notification in this regard has been issued.

It may be recalled that earlier Under the provisions of Prevention of Money-laundering (Maintenance of Records) Second Amendment Rules, 2017, published in the Extraordinary Gazette of India vide G.S.R. 538 (E) dated 01.06.2017, it was provided that

i) In case the client, eligible to be enrolled for Aadhaar and obtain a Permanent Account Number does not submit the Aadhaar number or the Permanent Account Number at the time of commencement of an account based relationship with a reporting entity, the client shall submit the same within a period of six months from the date of the commencement of the account based relationship. Provided that the clients, eligible to be enrolled for Aadhaar and obtain the Permanent Account Number, already having an account based relationship with reporting entities prior to date of this notification, the client shall submit the Aadhaar number and Permanent Account Number by 31st December, 2017.
(ii) In case the client fails to submit the Aadhaar number and Permanent Account Number within the aforesaid six months period, the said account shall cease to be operational till the time the Aadhaar number and Permanent Account Number is submitted by the client. Provided that in case client already having an account based relationship with reporting entities prior to date of this notification fails to submit the Aadhaar number and Permanent Account Number by 31st December, 2017, the said account shall cease to be operational till the time the Aadhaar number and Permanent Account Number is submitted by the client.

PIB

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Permanent Account Number (PAN) is the key identifier of taxable entity and aggregator of all financial transactions undertaken by one person. One PAN for one person is the guiding principle for allotment of PAN. However, for achieving the objective of one PAN to one assessee it is required to maintain uniqueness of PAN. The uniqueness of PAN is achieved by conducting a de-duplication check on all already existing allotted PAN against the data furnished by new applicant. Under the existing system of PAN only demographic data is captured. Some instances are found where multiple PANs have been allotted to one person or one PAN has been allotted to multiple persons despite the application of de-duplication process based on demographic data. Linkage of Aadhaar number into PAN database will allow a robust way of de-duplication as Aadhaar number is based on biometric attributes of finger prints and iris images. Further seeding of Aadhaar will allow the Income-tax Department to weed out any undetected duplicate PANs. It will also facilitate resolution of cases of one PAN allotted to multiple persons.

As on 27.7.2017, 11,44,211 PANs have been identified and deleted or de-activated in cases where multiple PANs were found allotted to one person. Similarly, as on 27.7.2017, 1,566 PANs have been identified as ‘Fake’ which were allotted to either non-existent person or in the names of persons with false identities. In this regard, the PAN service provider carries out onsite verification of PAN applications to verify identity and addresses of the applicant and share the report of such verification to the concerned Assessing Officer. On receipt of such report the assessing officer also conducts enquires and mark the PAN as “Fake”. If information of allotment of more than one PAN is received, the facility to delete or de-activate the PAN is available with the Assessing Officer through application software. Further, during 2004 to 2007, an exercise for de-duplication of PAN was conducted in the Department to identify probable duplicate PANs, which were consequently deleted or de-activated by the concerned assessing officers after examinations.

This was stated by Shri Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Rajya Sabha today.

PIB

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Rules regarding quoting of PAN for specified transactions amended

The Government is committed to curbing the circulation of black money and widening of tax base. To collect information of certain types of transactions from third parties in a non-intrusive manner, the Income-tax Rules require quoting of Permanent Account Number (PAN) where the transactions exceed a specified limit. Persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity.

One of the recommendations of the Special Investigation Team (SIT) on Black Money was that quoting of PAN should be made mandatory for all sales and purchases of goods and services where the payment exceeds Rs.1 lakh. Accepting this recommendation, the Finance Minister made an announcement to this effect in his Budget Speech. The Government has since received numerous representations from various quarters regarding the burden of compliance this proposal would entail. Considering the representations, it has been decided that quoting of PAN will be required for transactions of an amount exceeding Rs.2 lakh regardless of the mode of payment.

To bring a balance between burden of compliance on legitimate transactions and the need to capture information relating to transactions of higher value, the Government has also enhanced the monetary limits of certain transactions which require quoting of PAN. The monetary limits have now been raised to Rs. 10 lakh from Rs. 5 lakh for sale or purchase of immovable property, to Rs.50,000 from Rs. 25,000 in the case of hotel or restaurant bills paid at any one time, and to Rs. 1 lakh from Rs. 50,000 for purchase or sale of shares of an unlisted company. In keeping with the Government’s thrust on financial inclusion, opening of a no-frills bank account such as a Jan Dhan Account will not require PAN. Other than that, the requirement of PAN applies to opening of all bank accounts including in co-operative banks.

The changes to the Rules will take effect from 1st January, 2016.

The above changes in the rules are expected to be useful in widening the tax net by non-intrusive methods. They are also expected to help in curbing black money and move towards a cashless economy.

A chart highlighting the key changes to Rule 114B of the Income-tax Act is attached.

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