Any law or directive that seeks to rein in black money should be innovative and radical enough to effect major evolutionary changes. The Black Money Act has taken incremental steps and widened the net against black money, but a more serious problem is to address the domestic black money where the battle will be long. There is no clear estimate of domestic black money and it represents a bigger danger which needs conviction, commitment, and dedication on the part of the government to contain this menace.
A serious introspection is required and the domestic black money can only be addressed with full determination. Battery of steps have been taken but it will be continuous and a long battle which is unlikely to be won in near future till its creation and the root cause is not eradicated and boldest steps are not taken. The Benami Transactions (Prohibition) Amendment Bill, 2015 tabled in the Lok Sabha in May 2015 is aimed at catching those with black money in the domestic economy.
One of the stringent recommendations from SIT on curbing generation of black money in India was putting a cap on huge cash transactions.
In a move to ensure this, the finance minister, in his 2015-16 Budget speech, had proposed making quoting of Permanent Account Number (PAN) mandatory for all sale and purchase of over Rs 1 lakh. The government received representations from various quarters against the said proposal. With a view to bring in a balance between burden of compliance on legitimate transactions and the need to capture information regarding transactions of higher value, the Central Board of Direct Taxes has issued a press release amending its initial proposal and raising the monetary limit for requirement to quote PAN for any transaction from Rs 1 lakh to Rs 2 lakh, irrespective of the mode of payment.
It has also modified Rule 114B of Income Tax Rules for other transactions as well. Some important highlights of the amendment in the said rule are as follows:-
* For the sale of immovable property, monetary limit has been increased from Rs 5 lakh to Rs 10 lakh.
* For payment of hotel or restaurant bills, monetary limit has been increased from Rs 25,000 to Rs 50,000
* If you wish to open a basic savings bank deposit account or a Jan Dhan Account, the requirement of furnishing PAN has been waived. However, PAN needs to be quoted for opening of all other bank accounts, including in co-operative banks.
* Purchase of jewellery/bullion does not require any PAN now and this requirement has been merged with the purchase/sale of any goods or services exceeding Rs 2 lakh
* For purchase/sale of shares of unlisted company, monetary limit has been increased from Rs 50,000 to Rs 1 lakh.
These measures will help in widening the tax base by non-intrusive methods, as well as help in reducing the burden on people to quote PAN every time they enter into a transaction.
Even if no further revision is done regarding the monetary limits, the government should ensure that there are proper measures regarding transactions where the amount is below the revised threshold limit.
For sale/purchase of gold, there should be no threshold limit at all and quoting of PAN should be made mandatory.
The writer is executive director, Nangia & Co