Government of India has amended the rules for quoting of PAN for certain high value transactions. These rules emphasize the vital importance of having and quoting of PAN. Basically these changes deal with mandatory quoting of PAN in respect of certain transactions which exceed a specific limit. After many recommendations and representations, Income-tax Department has decided that quoting of PAN will be required for transactions for an amount exceeding Rs.2 lakh regardless of the mode of payment. It will help them to keep an eye on high value transactions entered by the people and to ensure that taxes are paid on the same.
Let us have a look at the changes in requirements in respect of various transactions.
| Sr no | Nature of transaction | Mandatory requirement of Quoting PAN | Applicability to NRI* | |
| Earlier requirement
(Till 31-12-2015) |
Requirement
from 01-01-2016 |
|||
| 1 | Immovable property | Sale/ purchase valued at Rs.5 lakh or more | i. Sale/ purchase exceeding Rs.10 lakh;
ii. Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN. |
Yes |
| 2 | Motor vehicle (other than two wheeler) | All sales/purchases | No change | Yes |
| 3 | Time deposit | Time deposit exceeding Rs.50,000/- with a banking company | i. Deposits with Co-op Banks, Post Office, Nidhi, NBFC companies will also need PAN;
ii. Deposits aggregating to more than Rs.5 lakh during the year will also need PAN |
Yes |
| 4 | Deposit with Post Office Savings Bank | Exceeding Rs.50,000/- | Discontinued | NA |
| 5 | Sale or purchase of securities | Contract for sale/purchase of a value exceeding Rs.1 lakh | No change | Yes |
| 6 | Opening an account (other than time deposit) with a banking company. | All new accounts. | i.Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts);
ii. Co-operative banks also to comply |
Yes |
| 7 | Installation of telephone/ cellphone connections | All instances | Discontinued | NA |
| 8 | Hotel/restaurant bill(s) | Exceeding Rs.25,000/- at any one time (by any mode of payment) | Cash payment exceeding Rs.50,000/-. | No |
| 9 | Cash purchase of bank drafts/ pay orders/ banker’s cheques | Amount aggregating to Rs.50,000/- or more during any one day | Exceeding Rs.50,000/- on any one day. | No |
| 10 | Cash deposit with banking company | Cash aggregating to Rs.50,000/- or more during any one day | Cash deposit exceeding Rs.50,000/- in a day. | Yes |
| 11 | Foreign travel | Cash payment in connection with foreign travel of an amount exceeding Rs.25,000/- at any one time (including fare, payment to travel agent, purchase of forex) | Cash payment in connection with foreign travel or purchase of foreign currency of an amount exceeding Rs.50,000/- at any one time (including fare, payment to travel agent) | No |
| 12 | Credit card | Application to banking company/ any other company/institution for credit card | No change.
Co-operative banks also to comply. |
No |
| 13 | Mutual fund units | Payment of Rs.50,000/- or more for purchase | Payment exceeding Rs.50,000/- for purchase. | Yes |
| 14 | Shares of company | Payment of Rs.50,000/- or more to a company for acquiring its shares | i. Opening a demat account;
ii. Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction. |
Yes |
| 15 | Debentures/ bonds | Payment of Rs.50,000/- or more to a company/ institution for acquiring its debentures/ bonds | Payment exceeding Rs.50,000/-. | Yes |
| 16 | RBI bonds | Payment of Rs.50,000/-or more to RBI for acquiring its bonds | Payment exceeding Rs.50,000/-. | No |
| 17 | Life insurance premium | Payment of Rs.50,000/- or more in a year as premium to an insurer | Payment exceeding Rs.50,000/- in a year. | Yes |
| 18 | Purchase of jewellery/bullion | Payment of Rs.5 lakh or more at any one time or against a bill | Deleted and merged with next item in this table | NA |
| 19 | Purchases or sales of goods or services | No requirement | Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction. | No |
| 20 | Cash cards/ prepaid instruments issued under Payment & Settlement Act | No requirement | Cash payment aggregating to more than Rs.50,000 in a year. | No |
Transactions done by Minor having no income :
A minor, having no income chargeable under Income-tax, shall quote the Permanent Account Number of his father, mother or guardian. If he is having any Income chargeable under Income-tax, then he will be required to quote his own PAN.
Person having no PAN:
In case a person entering into any of these transactions is not having a PAN, he will be required to furnish Form no. 60 along with any one of the specified documents to establish their identity. A person who has agricultural income and is not in receipt of any other income chargeable to income-tax should furnish Form no 61 instead of Form no 60.
Now, there are chances of people declaring false information in this form. To overcome the same rules regarding quoting of PAN have been made more severe. Income-tax Department have provided for Penalty of Rs 10,000/- for declaring false information. Also punishment of rigorous imprisonment may be imposed. Click here to know about how to apply for PAN.
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