No need to phase out PAN, says Revenue Secy Ajay Bhushan Pandey

Permanent account number (PAN) will not get phased out said Revenue Secretary Ajay Bhushan Pandey.

"Don't see any need for phasing it out, it's people's choice. Today we have 20 crore PAN linked to Aadhar, more than 120 crore people with Aadhar. Supposing someone wants PAN number, he has to first have Aadhar then generate PAN through that and then start working on that. Now with Aadhar, he doesn't have to generate PAN or apply for PAN, can directly start using Aadhar. So it's a great convenience," Pandey told Moneycontrol.

In her maiden Budget speech on July 5, Finance Minister Nirmala Sitharaman announced that PAN and Aadhaar card can now be used interchangeably.

"Your PAN base indirectly moves from 22 crore to 120 crore. PAN and Aadhar both will exist because some people may choose to use one over the other. But at the backend, every PAN will have an Aadhar and every Aadhar will have a PAN," Pandey said.

The government stands to gain about Rs 30,000 crore from the tax proposals made in the budget.

"It's not a very significant increase. This would largely be on account of two items. One is the tax on the people earning a significant amount and the other is the duty on petroleum," Pandey said.

Total gain from the above two items put together would be Rs 30,000 crore and from petroleum alone for 9 months would be about Rs 22,000 crore, Pandey said.

The government estimates tax collection from custom duty to be around Rs 3,000 crore to Rs 4,000 crore.

Sitharaman, on July 5, pegged the Goods & Services Tax (GST) collection in the Union Budget at Rs 6.63 lakh crore for FY20, up from last year’s revised collections of Rs 6.43 lakh crore.

In the Interim Budget presented in February, the total mop-up from indirect tax was pegged at over Rs 7.61 lakh crore for FY20.

However, the current economic slowdown has led to concerns over the need to have realistic targets.

"As compared to the BE in the Interim Budget, and the current economic situation, we have made a realistic estimate of 14 percent growth compared to last year's actual GST collection. On a monthly basis, these are initial trends and we hope for to pick up in the coming few months," Pandey said.

Pandey also said that the 2 percent tax deducted at source (TDS) to be levied on cash withdrawal exceeding Rs 1 crore for a year from a bank account is a means to curb unlawful transactions and for genuine transactions, the credit for it can be taken while filing advance tax for that quarter.

"Ideally the government should not be getting any money out of it. People should not have the need to withdraw more than that much amount. It is not a revenue mobilization method, it is more to promote less cash economy," Pandey said.