To curb black money, Govt mulls making PAN mandatory for NGOs, business entities

The Government has been mulling over making Pan Card mandatory for NGOs and business entities. According to reports, the Ministry of Corporate Affairs (MCA) has proposed amendments to the I-T and PMLA Acts and making it compulsory for companies/NGOs to get a PAN at the time of incorporation.

The company's top executives might also have to submit their Aadhaar details. Experts believe that the move would help in curbing black money and would make it difficult for benami properties to survive.

Submission of Aadhaar details and Pan card would also help in tracking down shell companies owners.

The government also wants to set up a mechanism under which it can make any entity that has a cumulative annual transactions of over Rs 2 lakh to comply with law.

At present, PAN is automatically generated for newly-incorporated entities, but not its partners and trusts.

Earlier this month, the government said that it would disqualify more than 1 lakh company directors over their association with shell firms.

The corporate affairs ministry has “identified 1,06,578 directors for disqualification under Section 164(2)(a) of the Companies Act, 2013 as on September 12, 2017,” an official release said.

The government has also asked banks to restrict the operation of the companies’ accounts by the disqualified directors.

Under Section 164, a director in a company that has not filed financial statements or annual returns for three financial years continuously would not be eligible for re- appointment in that company or any other firm for five years.

Signalling that more regulatory action is expected, the ministry is further analysing the data of the 2.09 lakh firms available with the Registrar of Companies (RoCs) to identify the directors and the significant beneficial interests behind these entities.