But mobile wallet companies say many consumers are not ready to give out their PAN
Come New Year and your mobile wallet might not be as convenient as it is at present. According to a finance ministry circular, users of mobile wallets such as Paytm, FreeCharge and MobiKwik would need to give their permanent account number (PAN) if annual transaction exceeds Rs 50,000.
“This circular means if a consumer is spending Rs 10,000 per month from the wallet, after the fifth month, the consumer would have to quote their PAN; otherwise, we would stop any transaction from that wallet,” said a spokesperson of a major mobile wallet company.
According to the circular, the move is to curb circulation of black money and to widen tax base. “To collect information of certain types of transactions from third parties in a non-intrusive manner, the income tax rules require quoting of PAN where the transactions exceed a specified limit. Persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity.”
One of the recommendations of the special investigation team on black money was that quoting of PAN should be made mandatory for all sales and purchases of goods and services where the payment exceeds Rs 100,000.
According to the finance ministry, cash cards, prepaid instruments issued under the Payment & Settlement Act would also be investigated for black money transactions and PAN cards would be required for cash transactions above Rs 50,000 in a year.
At present, mobile wallet companies ask customers to fill the Know-Your-Customer (KYC) form for monthly transactions above Rs 10,000. After filling the KYC form, the limit is enhanced to Rs 100,000 a month.
Mobile wallet companies say many consumers are not ready to give out their PAN.
“A consumer who does not want to give his PAN would be able to spend roughly Rs 4,000 per month. It would affect the utility of the wallet, which is now used for a variety of tasks as well as immensely affect our business,” added the spokesperson.
Also, mobile wallets currently do not have any mechanism or technology to assess PAN. “We would have to add new layers of technology to make PAN a part of our transaction process,” the spokesperson added. Mobile wallet service providers plan to approach the government through Ficci and other industry bodies to get clarity on the circular.
“We cannot directly approach the government; so we have asked these industry bodies to help us get clarity of the situation. If this is enforced, we would have to revamp the way we conduct business and it would also affect the usage of the mobile wallet, which has now become as important as a debit or credit card,” the spokesperson added.
