Finance Minister Nirmala Sitharaman announced in her budget speech that PAN is not mandatory for cash transactions of above Rs 50,000. Instead, Aadhaar card can be quoted to serve the same purpose.
Revenue Secretary Ajay Bhushan Pandey said Saturday banks and financial institutions will be henceforth upgrading their system to accept Aadhaar card instead of PAN for the transaction of more than Rs 50,000.
PAN was earlier made mandatory for such high volume cash transaction to curb black or undocumented money. It was also made mandatory for purchase of immovable property of more than Rs 10 lakh.
FM Sitharaman also proposed in her Union Budget speech the use of Aadhaar number for filing of income tax returns. This will at least facilitate the filing of income tax by those individuals who don’t have a PAN card.
Pandey said, “Today you have 22 crore PAN cards which are linked to Aadhaar… You have more than 120 crore people who have Aadhaar. Then supposing somebody wants PAN, he has to first use Aadhaar, generate PAN and then start using it. With Aadhaar the advantage would be he now does not have to generate PAN. So this is a great convenience.”
Pandey mentioned that the PAN will not be phased out and it will exist along the Aadhaar.
Late last year the apex court ruled that Aadhaar need to be linked with PAN to file income tax returns.