Reserve Bank of India has now made it mandatory to furnish PAN Card details, every time money is being sent out of India.
In a detailed statement RBI said " “Statement on Developmental and Regulatory Policies”, RBI has announced that furnishing PAN Card is must for sending money abroad." Issued by Jose J. Kattoor, Chief General Manager at RBI, this press release has several updates related to financial investments and remittance abroad.
RBI has altered the Liberalised Remittance Scheme rules, which allowed money transfer up to $25,000 without any PAN Card requirement. Henceforth, any amount which is sent abroad has to be accompanied with PAN Card details, so that Govt. is aware how much money is being sent out of India, and by whom.
What Is Liberalised Remittance Scheme?
Liberalised Remittance Scheme or LRS was part of Govt.’s liberalisation initiatives, in order to aid remittance outside India.
Under this scheme, any Indian can send money up to $250,000 per year outside India, and mainly this is being used by parents to send money to their kids’ colleges in abroad or to buy stocks of global companies like Google, Microsoft etc.
Expenses such as medical costs can be also covered via this scheme.
LRS is not available for corporates, partnership firms, HUF and trusts; and cannot be used for forex trading. Till now, up to $25,000 didn’t require any PAN Card details.
Why Govt. Made PAN Mandatory For LRS?
In the month of January, immediately after demonetization, Govt. of India realized that celebrities and businessmen were abusing LRS program by sending huge sums of money abroad for betting and for purchasing properties.
The Govt. had to make PAN mandatory as it was found that several rich Indians have been sending more than the prescribed limit of LRS, and there was no way to check the outflow of money.
It was also feared that black money is being shipped out, via this scheme.
