Reserve Bank of India has made it compulsory to confer PAN Card details to send money outside India.
PAN Card is Inevitable
The Government of India has recently made PAN Cards Compulsory. Now, whenever the money will be sent abroad for purposes of kids’ education or to make purchases of shares in a foreign market sender should have pan card.
The initiative was taken to prevent transferring of unaccounted money and to fulfill the taxation principles. Through the press release “Statement on Developmental and Regulatory Policies”, RBI declared to make PAN Card compulsory after observing the violation of Liberalized Remittance Scheme (LRS) by wealthy Indians.
Violation of Liberalized Remittance Scheme
The scheme was launched in 2004 where LRS or Liberalized Remittance Scheme became a part of Government’s liberalization initiatives that provide aid to people who can send money up to $250,000 everywhere across the nation. Moreover, LRS program also gives Indians an opportunity to buy fresh stocks of foreign companies. But, Things has changed now.
On Wednesday, RBI imposed the changes after discovering that affluent citizens – businessmen, Bollywood celebrities, and traders sent money abroad to bet on stocks and properties. It should be noted that the LRS limit was increased in 2015 from $1, 25,000 to $2,50,000.
“Since the said reporting system uses the Permanent Account Number (PAN) of the remitter as a Unique Identifier to aggregate the remitter-wise data, it has been decided that furnishing of PAN, which hitherto was not to be insisted upon while putting through permissible current account transactions of up to USD 25,000, shall now be mandatory for making all remittances under LRS,” said RBI.
RBI has also suggested that Authorized dealers or AD banks will now keep an eye on the remittances that have already been sent during the course of a financial year that would result in monitoring and compliance of transactions with the LRS limit.
What do you think about this move?