Aadhaar-based authentications would be soon made compulsory for all large cash based transactions.Till now, participants had to quote PAN Card for these transactions, but that will change.PAN is not enough anymore.
Aadhaar-Based Authentication For Cash Based Transactions
Large cash transactions, in the value of Rs 20 lakh/year and more will soon have Aadhaar-based authentication as a mandatory requirement.
This is a proposal under the new Finance Bill, wherein several crucial amendments have ben made to create a cashless environment, wherein every major transaction is authenticated, and validated using Aadhaar.Thankfully, transactions of lower demoninations have been exempted from this rule.
A senior Govt. official said, “We want to work out the limit in a way that only people making transactions above a certain value are tracked without causing hardship in case of smaller transactions,”As per the incoming reports, the threshold of Rs 20 lakh in cash transactions have been proposed.
How will it Work ?
Merely entering Aadhaar number is not enough.
Govt. is proposing a Aadhaar based authentication, which includes three options for the users:
- Electronic KYC or Know Your Customer mechanism, which once done, can be used for all the transactions to authenticate them
- Biometric authentication of the participants, at the time of the transaction
- One-time OTP based Aadhaar authentication, which can be accomplished using mobile number connected with the Aadhaar or email id.
All these three types of Aadhaar authentication will ensure that all high-value transactions are tracked and traced seamlessly, and appropriate taxes are levied on them.
Which Transactions It Can Cover?
High value transactions such as foreign currency conversion, purchasing or selling real estate, buying new vehicles, investment in companies etc can be covered under this new Aadhaar authentication rule.
As per some industry observers, Govt. was forced to implement this new Aadhaar-authentication rule because several PAN Card users were quoting wrong numbers, and trying to escape taxes.
Once Aadhaar based authentication is made a rule, then IT Dept. can track every high value cash transaction.
Whether the use of PAN Card will be entirely stopped or it still can be used besides Aadhaar is not yet clear.
We will keep you updated, as more details come in.