Though the government’s one-time black money compliance window for money stashed overseas garnered a mere
Rs 3,770 crore, getting rid of black money remains a focus area. While it is understandable that industry’s protests over the General Anti-Avoidance Rules (GAAR) being abused by the taxman resulted in GAAR implementation being postponed, what explains finance minister Arun Jaitley diluting his budget promise of making it mandatory to quote a Permanent Account Number (PAN) for cash transactions over Rs 1 lakh? The suggestion to make quoting of PAN mandatory for all sales and purchases of goods and services where the payment exceeds R1 lakh had come from the Special Investigation Team on black money. This has now been raised to Rs 2 lakh.
The Central Board of Direct Taxes (CBDT) has said that the government has raised the limit as it ‘received numerous representations from various quarters regarding the burden of compliance this proposal would entail’. Interestingly, the CBDT has also increased the monetary limits for mandatory quoting of PAN for some other transactions ‘to bring a balance between the burden of compliance on legitimate transactions and the need to capture information relating to transactions of higher value’—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. What is difficult to understand is that if the Rs 50,000 limit for quoting of PAN for financial transactions like bank drafts or bank deposits can be adhered to effectively, why should the limit for other cash transactions, especially bullion and jewellery and real estate—the two areas where the biggest chunk of black money gets used—be any different? Clearly, black money is an area where all political dispensations lack the courage to deal with a firm hand, and this is what is keeping the black economy flourishing.