You may need to show PAN card for small transactions too. Here are the details

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You may need to show PAN card for small transactions too. Here are the detailsIn a bid to keep the momentum gained for cashless economy due to demonetisation, the government might announce big disincentives in the upcoming Budget for usage of cash.
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Reportedly, the upcoming budget could come up with a series of such big disincentives. The government may reduce threshold for quoting PAN card for cash transactions, say sources.

The limit, which at present is is Rs 50,000 now, may be brought down to Rs 30,000 to bring more transactions within formal economy. As per the sources, the threshold for quoting PAN Card details for merchant transactions can also be reduced.

This comes as an move by the government to tighten the noose around people who deal in large cash transactions.

In fact, the threshold for quoting PAN Card details for merchant transactions could also be brought down from current Rs 2 lakh. With Aadhaar now having the government's legal backing, the usage for Aadhar card may also be made mandatory as an alternative for people not having PAN card.

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In addition to these steps, the government may also announce cash-handling charges for cash payments above a certain limit.

Reportedly, a levy could be in the works for cash transactions over Rs 1 lakh.

"The scale of the implicit cost of transacting in cash is not fully understood. We are of the opinion that licencing authorities including government agencies should levy a cash handling charge for payments in cash above a certain threshold. The cash handling charge so collected should be exclusively used to fund new infrastructure for accpeting digital payments (like POS devices)," a source told ET. .

The move is aimed at moving from a less-cash to a cashless society post the demonetisation drive that was brought into effect by PM Modi on November 8.

These measures will help the government stay on track towards a less-cash economy as there are concerns that easing of cash-withdrawal limits at banks and ATMs might take the economy back to pre-demonetisation prevalence of cash.

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