BE READY to mandatorily flash your PAN card, for any purchase of jewellery worth Rs 5,00,000 or more from Friday a move that would help the tax department keep an eye on such high value transactions.
As per the amendments in the income tax rules, coming into effect from July 1, quoting PAN (permanent account number) will be mandatory for any payment of Rs 5,00,000 or more for purchase of bullion or jewellery.
High-value purchase of jewellery, among valuables, have often been feared to be a much favoured route for circulation of black money and quoting of PAN would help the tax authorities in tracking such transactions.
Recently, RBI had also asked the banks to consider the jewellers and bullion dealers as high-risk customers and to keep an en hanced vigil on their transactions. The business transactions of jewellers and bullion dealers are highly cash intensive in nature and it is feared that they could be used for flow of black money into the system.
In order to check any possible money laundering, the banking sector regulator in January wrote to banks and financial institutions to treat the accounts of entities dealing in the jewellery and bullion trade as `high-risk'.
Besides jewellery purchase of Rs 5,00,000 and above, furnishing of permanent account number would be mandatory for issuing of a debit card by any bank, as against the current practice of the PAN being asked for issuing credit cards only, from Friday.
The payment of Rs 50,000 or more in a year for life insurance premium would also require permanent account number from Friday July 1st 2011.
