In order to reduce black money and to curb the black money holders, Government of India has asked all the banks to give the PAN card details of all bank account holders by February 28, 2017.
This is the major revolution which didn’t hold before in the banking history by the Government to excavate black money. You can measure the intensity of this change by the fact that Government had to adjust a major income Tax regulation to implement this order.
If PAN card is not available, then the banks will have to offer details related to Form 60. Finance Ministry in a statement said, “Income tax rules have been changed, and the banks will obtain and link PAN or Form 60 in all existing bank accounts, other than Basic Savings Bank Deposit Accounts, by 28 February 2017, if not already done.”
Complete step-by-step process of using BHIM App for making cash transactions
Notable releases from this announcement are the basic savings bank deposit accounts, also called no-frills accounts due to low minimum balance requirement like Jan Dhan Accounts. However, PAN card details of Jan Dhan Account holders won’t be extracted as of now.
Why has Government decided to perform this Massive Bank Operation?
According to the reports, as of February 2016, there were 24.37 crores PAN card holders in India, which should be around 30 crores by now. Now, as per RBI data dated March 2016, there is 14.4 crore deposit accounts and 11.7 saving accounts in the country. Moreover, comparing these two data would be a tough task for bank officials, as not all bank account holders have provided their PAN details and not all PAN card holders have a bank account.
Why Jan Dhan Accounts Freed From this Operation?
The government has exempted the Jan Dhan accounts which are 26.51 crore bank accounts in India today. However, this is very interesting because Jan Dhan Accounts there has been a total of Rs 70,070 crore deposited and in that 40 % of them have zero balance. So, there is a lot of mismatch in the data, and the government is to investigate this with a proper audit of these accounts.
Government, as part of the investigation, ordered the respected banks to provide details and status of cash deposits on all the bank accounts, which witnessed the excessive amount of cash deposit between November 9th, 2016 to December 30th, 2016. These verifications will help them to track and monitor black money hoarders in the country.