According to a provision added by Finance minister Arun Jaitley in the latest 2017-18 Budget, people would have to pay double the tax if they make any payment without a PAN card.
Till now there was a clause that said that only transactions of Rs. 1 lakh and above would require a PAN number whereas in few states even that was not possible.
But according to the latest provision that has been added in this budget, the government is now looking to increase their Tax Income base by making sure that the country moves towards a cashless economy.
They have thus decided to make PAN Card mandatory for the transaction of any kind and increase their current Tax Base.
Generally, a TDS cut is made from person’s salary in advance and then that person files a Tax Return if he or she is eligible to get it.
From now on, with this new provision in place, where ever the TDS is mandatory, a person will have to show his PAN card or pay double the tax.
On the other hand, the government, with this budget, has now made a much stricter penalty for people who cheat on their Income Tax.
Notably from 1 January onwards, the government has also started issuing new PAN cards which have additional security features, making it harder to be tampered with.
These new cards also have QR Codes or Quick Response codes and a new location for your signatures and PAN Numbers.
So with the help of these new and old registered PAN Numbers, the income tax department would be able to keep a track of all your transaction and the tax that you are or are not paying.