Background:
In order to curbing the circulation of black money and widening tax base, the government has recently notified changes in the monetary limits that will require mandatory quoting of PAN with effect from 01-01-2016, under section 139A (5) (c) and furnishing a statement of financial transaction under section 285BA read with rule 114B to 114D as amended via notification 95/2015 dated 30-12-2015 and liability of TCS w.e.f 01-06-2016 where consideration on sales of goods or providing services received in cash.
In Case, where PAN of the buyer available:
Quoting of PAN Requirements:
PAN will be required to be quote on invoice / bill at the time of Sale or purchase of any goods or services if a transactions above Rs. 2,00,000/- regardless of the mode of payment (weather in cash or cheque).
Where buyer is a minor, in that case PAN of his father or mother or guardian, as the case may be, on the invoice / bill of the said transaction, shall be quote.
Reporting Requirements:
Every person who is liable for audit under section 44AB of the Act (reporting person i.e. seller) –
The above rule will not be apply in case where buyer is a –
Therefore, we can say that quoting of PAN on the invoice is mandatory only if transaction exceed Rs. 2,00,000/- and reporting (filling of annual return in Form 61A) is mandatory only if Cash payment received exceed Rs. 2,00,000/-In Case, where PAN of the buyer not available who is a resident of India:
Quoting of PAN Requirements:
Where a buyer does not have and who enters into any transaction for sales or purchases any goods or services, he shall make a declaration in Form 60 giving therein the particulars of such transaction if a transactions above Rs. 2,00,000/- regardless of the mode of payment (weather in cash or cheque).
Reporting Requirements:
Every person who is liable for audit under section 44AB of the Act (reporting person i.e. seller) has received Form-60 on or after 01-01-2016:
Penalty:
TCS:
Further, if consideration for sales of Goods or Providing any service received in cash full or in part then under section 206C (1D) of the Act, Every person, being a seller who is liable to tax audit under section 44AB, is liable to collect from the buyer, a sum equal to 1% of sale consideration received in Cash only as income-tax, if such Cash sales consideration exceed Rs. 2,00,000/-.
(Author – Sombir Kataaria from Gurgaon and can be reached at somvirkataria@hotmail.com, 9911166244)
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. The observations of the author are personal view and the authors do not take responsibility of the same and this cannot be quoted before any authority without the written permission of the author.
Thanks for such good article, but I need to clarify penalty u/s 271FA is for non filing of Form No. 61A on time and for non filing of return of re-portable transaction. For non filing of Form No. 61, no penalty is specified u/s 271FA, please specify whether I am correct.