PAN to be tool against tax evasion

Come next financial year, the PAN card is likely to become the most potent tool for the Income Tax Department to unearth black money, tax evasion and instances of criminal financing in the country.

A recent directive of the Central Board of Direct Taxes (CBDT) to the I-T Dept has asked its officials to launch a special drive against those who have "not furnished their PAN (Permanent Account Number)" while entering into high value transactions.

The drive will end on March 20, eleven days before the current fiscal closes.

The measure has been taken on the recommendations of a high-level committee appointed by the CBDT last year to find those taxpayers who have gone missing without paying taxes, pegged at Rs 1,01,836 crore at present.

The committee under I-T Director General (Administration) was set up to examine pending cases on I-T demands under the categories "assesses not traceable" and "no assets/inadequate assets for recovery".

A top Finance Ministry official, involved in the planning of the latest drive, explains the idea behind the exercise which is being conducted across the country.

"The PAN card data which the I-T will obtain during the two month drive which started on February 20 will bolster the 360-degree profiling computer-based data-bank of the department. The new PANs will be fed into the system and then whenever a transaction is done using that identity, a flow chart of all credit/debit card, banking and other transactions from it will get displayed for the officer investigating," the official said.

"The 10-digit alphanumeric number (PAN) allotted by the I-T Department to taxpayers will be the most potent tool for the department to unearth tax crimes and evasion," the official said.

This will not only bring about a mechanism of non-intrusive investigation by department without troubling the taxpayer but will also streamline the financial data of each taxpayer for his assessing officer, the official added.

The charter of the drive mandates that taxpayers "will be required" to furnish their PAN if they already have one or "apply immediately for PAN if they do not have one".

"The department has tried to kill two birds with one stone. While the high-level committee found that a number of pending recovery cases reached a dead end because of non-availability of PAN cards, it also found that the PAN database itself is not complete. So while the committee had mandated I-T officials to go door-to-door to intimate such taxpayers, it will now be done under the umbrella of this directive," the official said.

The CBDT has also asked in the latest directive that such people will also be required to explain the source of the high value investments, deposits, expenditure and whether these were properly explained in the I-T returns filed by them.

"Persons who have not properly accounted for the high value transactions are required to pay due taxes and file the I-T return within this financial year, March 31, 2012," the directive said.

"A number of these people are those who figured in the probe of the high-level committee," another official said.

In view of the present drive, the department has also reportedly decided not to publish the names of such defaulters who owe more than Rs 10 crore as unpaid taxes, considering it as an "unfriendly measure" as of now.

The CBDT has also spelt out that there are "penal consequences" of either not reporting or obtaining a PAN card.

Source: Financial Express

RBI hikes Paypal payments ceiling to $3,000 per transaction

New Delhi: Users of online payments gateway PayPal in the country can now receive up to USD 3,000 per export-related transaction in their accounts, with the RBI raising this limit from USD 500 per transaction earlier.

The increase in the limit is with immediate effect, but merchants using Paypal accounts to receive funds would need to add their PAN (Permanent Account Number) and bank account details to comply with the RBI guidelines, PayPal said today.

The step will help the Indian SMEs and consumers who use Paypal to receive their payments. In addition, the move will support PayPal and the budding India business of its parent company eBay, an online marketplace.

"This is a huge step forward for PayPal and for Indian SMEs, who can grow their export business through e-commerce by tapping our 100 million active users in 190 markets across the globe, right from the US to the UK to Australia," PayPal India Country Manager Mayur Patel said in a statement.

"We are thrilled about the increase in transaction limit and would like to thank the RBI for understanding and being supportive of the needs of SMEs who wish to expand their business through cross-border trade," Patel added.

eBay, which claims to have an online community of 2.5 million in India, has about 12,800 registered merchants in the country, who consider selling through eBay either their primary or secondary source of income.

The Indian merchandise popular among foreign buyers includes precious stones and diamonds, jewellery, leather goods, handcrafts, furniture and ethnic wear.

eBay India Director - Category Management Kashyap Vadapalli said: "This is exciting news especially for eBay India merchants and Indian entrepreneurs who want to grow their business through retail exports and sell to millions of eBay's customers globally."

"Today's news can help these SME's sell higher valued hand-made jewelry, leather products, ethnic Indian clothing and even motor vehicle parts of up to USD 3,000 per transaction to buyers across the globe," he added.

Source: Financial Express

Sebi introduces uniform KYC norms

Mumbai: Capital market regulator Sebi today announced introduction of uniform norms (new forms and documents) for the purpose of customer identification by different market intermediaries like stock exchanges and mutual funds, a step intended to bring uniformity to the process.

"With a view to bring about uniformity in securities markets, it has also been decided that the same Know Your Customer (KYC) form and supporting documents shall also be used by all captioned Sebi registered intermediaries," the regulator said in a circular.

The new norms will be effective from January 1 next year.

"The intermediaries shall take necessary steps to implement this circular and ensure its full compliance in respect of all new clients from January 1, 2012," it said.

This comes after Sebi received feedback from the investors that various registered intermediaries follow different KYC requirements.

"In case of mutual funds, portfolio managers, collective investment schemes and venture capital funds, though certain basic requirements have been prescribed for Customer Due Diligence (CDD) or KYC, no specific KYC format has been prescribed. As a result, these intermediaries use different KYC formats and supporting documents," it said.

The new KYC form will have space for giving identity details including name, nationality, PAN and/or UID number besides details like address, gross annual income and occupation.

In addition, additional information specific to dealing in stock exchanges is also included in the form.

The customers will also have to furnish various documents relating to their identity, proof of address and other facts.

In case of corporates, they will have to provide copy of balance sheet for last two financial years, copy of latest holding pattern in their firm, copies of memorandum and articles of association and copies of board resolution for investment in securities market.

Foreign Institutional Investors will have to furnish copy of Sebi registration certificate, while registered societies will have to provide copy of such certificate and list of managing committee members.

Source: Financial Express