Updated: IT looks like the Finance Ministry has put on hold the new norms. A statement from the Finance Ministry says that The Central Board of Direct Taxes (CBDT) has decided not to change the norms until new orders. No reasons were given by the Ministry either.
The new norms were to be put into action to eliminate the problem of fake and multiple cards.
Earlier…
Getting a new PAN card (Permanent Account Number) will be tougher from February 3rd, 2014 as there are new rules that need to be adhered to. The decision has been taken to combat the increasing number of fake cases of PAN card being discovered.
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What is a PAN card & why is it necessary?
PAN card is a unique alphanumeric combination issued in the form of a laminated card.
A PAN number should look like this: AABPS1205E.
PAN card not only serves as an id proof, it also is mandatory for financial transactions such as for the few given below:
- Sale or purchase of any immovable property valued at five lakh rupees or more
- Sale or purchase of a motor vehicle or vehicle.
- A deposit, exceeding fifty thousand rupees, in any account with Post Office Savings Bank.
- A contract of a value exceeding one lakh rupees for sale or purchase of securities.
- Opening a bank account.
- Payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time.
- Payment in cash for purchase of bank drafts or pay orders or banker’s cheques for an amount aggregating fifty thousand rupees or more during any one day.
- Deposit in cash aggregating fifty thousand rupees or more with a bank during any one day.
- Deposit in cash aggregating fifty thousand rupees or more with a bank during any one day.
The 10 digit unique alpha numeric combination helps prevent tax evasion and keeps track of money transaction among high net worth individuals.
What are the new rules?
Official sources from the Finance Ministry says that to apply for a PAN card, a person will have to produce original documents of one’s Date of Birth and address proof to verify copy of documents submitted. Post verification, the original documents will be submitted to the applicant.
Earlier, an applicant needed to give only a photocopy of the documents required.
The Central Government’s ‘Know your Pan Card’ service helps verify and validate PAN cards, both new and old. Check the link here.
Why were the rules changed?
A consumer activist group had brought to light the fact that there was rampant misuse of PAN cards in the Indian Railways for Passenger Reservation under the Tatkal scheme. Also, it was discovered that jewelers were not furnishing information about buyers who did not provide PAN card details while buying bullion and that eventually results in both the parties evading tax.
Getting a PAN card is a necessity now as it is required in almost all financial transactions including buying property, investing in stocks, buying bullion, property, etc.
How will the new rules help?
It will be tougher to get a new PAN card. Period.
The fact that original documents needs to be furnished is a potential dampener for people who intend to apply for two or more PAN cards with which they evade tax.
You can apply for a PAN card here.