The minister's decision to enhance the limit for share transaction to Rs 10 lakh from the proposed Rs 50,000 for mandatory quoting of PAN or GIR number is difficult to appreciate. Whatever may be the compulsions of the government, the finance minister, by his own admission, yielded to representations from the members of the stock exchanges.

As per the provision of the modified finance bill, any person transacting in shares exceeding Rs 10 lakh will have to quote his PAN or GIR numbers. It is absurd to believe that a non-income tax payee can transact in shares up to Rs 10 lakh. If not so, than why anyone purchasing shares up to Rs 10 lakh is not being asked to quote his PAN or GIR numbers?

What is more absurd is that anyone opening a bank account or making a fixed deposit exceeding Rs 50,000 will berequired to quote his PAN or GIR number, but the same person can freely invest up to Rs 10 lakh in shares.

There is a provision in the finance bill that the Central Board of Direct Taxes (CBDT) will prescribe a form and contents of which shall be furnished by person not having either a GIR or PAN number. And, the finance minister while replying to the debate on the finance bill in the Lok Sabha on Friday had also announced that "to mitigate the hardships of persons not having a PAN of GIR number, I propose to provide that such persons can file a declaration and also proof of identity, if the transactions are made in cash".

All this will make the environment hassle-free for those wanting to park his black or white income in stocks and tough for those not paying taxes or those who are paying taxes but have yet to start filing returns.

Also the dilution of norms for a prosperous investing and stock broking community contradicts the spelled out objective of the finance minister for checking tax evasionsthrough mandatory use of PAN numbers.

Apart from bank accounts, fixed deposits exceeding Rs 50,000 and transactions in shares exceeding Rs 10 lakh, the assesses will be required to quote PAN or GIR numbers for sale and purchase of immovable property, motor vehicles, application for allotment of telephone connection and payment of hotel bills exceeding Rs 25,000.

The finance minister has later exempted certain categories of persons such as agriculturists and foreign tourists from the purview of these provisions. The exemption for agriculturists can be appreciated as they are not supposed to pay taxes.

Also the provisions cannot be applied to foreign tourists.

However, the favoured treatment being given to those investing hefty amounts not only tantamounts to encouraging tax evaders but also opening a channel of investment for them. There is no reason why a non-tax payer wanting to open a savings account or applying for a telephone connection has to undergo the hassle of signing a declaration and thoseinvesting up to Rs 10 lakh in shares be allowed to do so freely without any fear of being apprehended by tax collectors.