Cash transactions capped at ₹2L, Aadhaar must for PAN, tax filing
NEW DELHI: The government decided on Tuesday to lower the legal limit on cash transaction from ₹3 lakh to ₹2 lakh, and make Aadhaar number mandatory for filing income tax returns and applying for a PAN card.
The decisions were part of amendments moved to the finance bill, which puts Budget proposals into effect. The Budget 2017 had proposed cash transactions of more than ₹3 lakh value be banned but the finance bill tabled on Tuesday lowers the ceiling, said revenue secretary, Hasmukh Adhia.
“The difference between demonetisation and this is that the former is used to destroy the stock of black money while the ban will prevent the future flow of black money. This limit will also reduce the quantum of cash transactions in the economy,” Adhia had told HT. The penalty for violation is equivalent to the amount transacted. The amendments make Aadhaar must for tax returns and PAN applications from July 1. Aadhaar enrolment numbers will be accepted while filing ITR and PAN applications. Failing to declare Aadhaar may lead to PAN being deemed invalid.
The move is likely to roil activists who say the Aadhaar programme – the enrolment to a national database with biometric information such as fingerprints and iris scans – is meant to be voluntary, as declared by the SC in September last year.
“Aadhaar has been optional for ITR for a few years. The challenge will be for foreign nationals who pay taxes in India. We will have to see the amendment to understand its implications,” said Kuldip Kumar, leader, personal tax at PwC India. The amendment, however, says the government will specify exemptions for mandatory Aadhaar rule. The finance bill carries an unprecedented 40 amendments, according to PTI, and will also impact other laws such as RBI act and representation of people act. Political parties hit out at the tweaks, saying they were being done as ‘backdoor entry’.