The Central Government has decided to make Permanent Account Number (PAN) mandatory for remitting money abroad as the Reserve Bank of India has decided to stringent norms for Liberalised Remittance Scheme (LRS) as per which, anyone who is utilising the scheme will now have to share PAN details – something that was not applicable earlier with regards to current account transactions up to $25,000.
With this, the PAN is mandatory for sending money abroad for purposes of kids education or to buy shares in a foreign market, reported The Economic Times. The new rule will also help the government prevent individuals from sending unaccounted money in what seems to be a move to ensure that money transferred to a foreign country fulfils the tax criteria.
It may be noted that the scheme is mostly availed by Indians who send money abroad for the purpose of their children’s education or for purposes of investment in foreign stock market and properties. The LRS scheme was made available to Indians in 2004 and is mostly used by parents who have sent their children abroad for studies, primarily to pay fees and send allowance for expenses. Besides, the LRS scheme also grants Indians the provision to buy stocks of foreign companies on particular stock exchanges and also for buying property abroad. It may be noted that under the scheme, people can send money or invest almost everywhere in the world, reports said.
“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,” the RBI’s statement read.
