FIU and IT Department Join Hands to Check Suspicious Cash Transactions

Published: July 22, 2020

The Income Tax Department has been allowed to share the PAN Card details of an individual entity with the Financial Intelligence Unit so that the FIU can investigate the possible sources of any large cash transaction. It will help in the detection of such suspicious transactions at banks.

This has been allowed by the Central Board of Direct Taxes.

How will it help?

PAN or Permanent Account Number is a 10-digit alphanumeric number allotted by the income tax department to a person, firm or entity. This will enable the FIU in the determination of the individuals and entities who are engaged in suspicious cash transactions.

This can also be useful in the prevention of cases in which numerous small transactions are undertaken without mentioning the PAN number so that it does not look suspicious at all. However, if one or two PAN numbers can be obtained from this, it becomes easier to nab the culprits.

Details

The data will be shared by the FIU in two kinds of cases – First is in case the FIU already has the PAN details and the other is when it does not have the details. In the first case, the IT Department will only share the details about the PAN Card Holder such as his family members etc. whereas in the second case the IT Department will provide dump data of PAN Database to enable FIU to search.

What is the Financial Intelligence Unit (FIU)?

The Financial Intelligence Unit is the central agency that is mandated to obtain the cash transaction reports from the public and private sector banks every month and after analyzing the same, the suspicious transactions are forwarded to various investigation and law enforcement agencies so that proper inquiry can be launched against such cases to check possible instances of money laundering, tax evasion and terror financing.

All the transactions over Rs 10 lakh or its equivalent in foreign currency or a series of integrally connected transactions that sum up to Rs 10 lakhs or its equivalent in foreign currency are also reported to the FIU every month.

FIU derives its authority from the Prevention of Money Laundering Act (PMLA).

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