Transactions which require quoting of PAN (Section 139(5)(c))
PAN is a basic necessity which requires to be have as per Income Tax Act, 1961. Not quoting of PAN attracts many penalties and also keeping of PAN more than one also attract penalty of Rs. 10,000 so before to enter into any transaction it must be understood that quoting of PAN is required in the following 18 Transactions and also it should be kept in mind that such a TDS can be claimed while filing the Income Tax Return of that relevant previous year. This article delves into these transactions, highlighting the importance of PAN and the consequences of non-compliance. Following is the list of the transactions that require quoting of PAN.
| S. No | Category | Description | Quoting of PAN is not required | |
| 1. | Motor Vehicle Transactions: | Sale or purchase of a motor vehicle or vehicle other than Two Wheeled Vehicle | √ | TWO WHEELED VEHICLE |
| 2. | Opening of account with Bank/Co-operative Bank | Opening of an Account (Except Time Deposit mentioned below and Basic Savings Bank Deposit Account) with a Banking Company/Co-Operative Bank | √ | BASIC SAVINGS DEPOSIT A/C WITH BANKING CO./ CO-OPERATIVE BANK |
| 3. | Time Deposit Transactions: | A Time Deposit with
>> Banking Co./Co-Operative Bank >> Post Office >> Nidhi Company as per Companies Act, 2013 >> NBFC licensed by RBI If Amount >Rs 50,000 or Aggregating > Rs 5 lakh in a FY |
√ | IF AMOUNT IS LESS THAN OR EQUAL TO RS 50,000 OR LESS THAN OR EQUAL TO RS. 5LAKH IN A FY |
| 4. | Demat Account Opening: | Opening of Demant A/c with >> Depository
>> Participant >> Custodian of Securities >> Other Person registered with SEBI |
√ | – |
| 5. | Credit/Debit Card Application | Making an application to issue a Credit/Debit card | √ | – |
| Payment Exceeding Rs. 50,000 requires quoting of PAN | ||||
| 6. | Bank Draft/ Pay Order/ Banker’s Cheque | Purchase of Bank Draft/ Pay Order/ Banker’s Cheque from Banking Company/ Co-Operative Bank.
If Cash Payment During Any Day >Rs. 50,000 |
√ | CASH PAYMENT IS LESS THAN OR EQUAL TO RS. 50,000 IN A DAY OR ANY MODE OF PAYMENT OTHER THAN CASH |
| 7. | Cash Deposit | Cash Deposit in Banking Company/Co-Operative Bank or in Post Office during any 1 Day.
If Cash Deposit During Any Day >Rs. 50,000 or Rs. 2.5 Lakh in aggregate during the demonetization period i.e. from 09th November 2016 to 30th December 2016 |
√ | CASH DEPOSIT IS LESS THAN OR EQUAL TO RS. 50,000 IN A DAY |
| 8. | Purchase of Mutual Fund unit(s) | Purchase of Mutual Fund units >Rs. 50,000 through any mode of payment | √ | PAYMENT IS LESS THAN OR EQUAL TO RS. 50,000 THROUGH ANY MODE INCLUDING CASH. |
| 9. | Debentures / Bonds Acquisition | Acquisition of Debentures/ Bonds of a Company/ Institution issued by it
>Rs. 50,000 through any mode of payment |
√ | PAYMENT IS LESS THAN OR EQUAL TO RS. 50,000 THROUGH ANY MODE INCLUDING CASH. |
| 10. | Purchase of Bonds issued by RBI and purchased from RBI | Acquisition of Bonds issued by RBI and payment is also made to RBI which exceeds Rs. 50,000 through any mode of payment | √ | PAYMENT IS LESS THAN OR EQUAL TO RS. 50,000 THROUGH ANY MODE INCLUDING CASH. |
| 11. | Prepaid payment Instruments | Payment in Cash/ Bank Draft/ Pay Order/ Banker’s Cheque of an amount > Rs. 50,000 aggregate in a financial year for one or more prepaid payment instruments (As defined in the policy guidelines for issuance and operation of pre-paid payment instruments issued by Reserve Bank of India u/s18 of the Payment and Settlement Systems Act, 2007) to a Banking Company/Co-Operative Bank/ to Any Other Company/ Institution. | √ | Payment is less than or equal to Rs. 50,000 in a FY through any mode including cash. |
| 12. | Hotel/ Restaurant | Cash Payment exceeding Rs. 50,000 to Hotel/Restaurant against Bill(s) at any one time | CASH PAYMENT LESS THAN OR EQUAL TO RS. 50,000 OR ANY MODE OF PAYMENT OTHER THAN CASH | |
| 13. | Foreign Country Travel / Purchase of Foreign Currency | Cash Payment exceeding Rs. 50,000 in connection with Travel to Any Foreign Country or Purchase of Foreign Currency at Any One time | √ | CASH PAYMENT IF LESS THAN OR EQUAL TO RS. 50,000 OR ANY MODE OF PAYMENT OTHER THAN CASH AT ONE POINT OF TIME |
| 14. | LIC Premium paid | Payment > Rs. 50,000 for LIC Premium made to Insurer in a FY | √ | PAYMENT IS LESS THAN OR EQUAL TO RS. 50,000 IN A FY THROUGH ANY MODE INCLUDING CASH. |
| Amount Exceeding Rs. 1,00,000 requires quoting of PAN | ||||
| 15. | Sale/ Purchase of Securities (except Shares) | Contract for sale/purchase of securities (except shares) as defined in SCRA Act, 1956, amounting to more than Rs. 1 Lakh per transaction | √ | TRANSACTION IS LESS THAN RS. 1 LAKH THROUGH ANY MODE INCLUDING CASH |
| 16. | Sale/ Purchase of Unlisted Shares | Sale or purchase, by any person, of shares of a company not listed in a recognised stock exchange, amounting to more than Rs. 1 Lakh per transaction | √ | TRANSACTION IS LESS THAN RS. 1 LAKH THROUGH ANY MODE INCLUDING CASH |
| Amount Exceeding Rs. 10 Lakh requires quoting of PAN | ||||
| 17. | Sale/ Purchase of Immovable Property | >>Sale/Purchase of Immovable Property for an amount exceeding Rs. 10 lakh or
>>Valued By Stamp Valuation Authority referred to in section 50C of the Act at an amount exceeding 10 Lakh Rupees. |
√ | SALE/PURCHASE OF IMMOVABLE PROPERTY EQUAL OR LESS THAN RS. 10 LAKH THROUGH ANY MODE INCLUDING CASH |
| Amount Exceeding Rs. 2 Lakh requires quoting of PAN | ||||
| 18. | Sale/ Purchase of Any Goods/ Services | Sale or Purchase, by any person, of goods or services of any nature other than those specified above exceeding Rs. 2 Lakh per Transaction | √ | SALE/PURCHASE PER TRANSACTION LESS THAN 2 LAKH THROUGH ANY MODE INCLUDING CASH |
Conclusion: Understanding the scenarios where PAN quoting is mandatory is essential to avoid penalties and ensure compliance with the Income Tax Act. Adhering to PAN requirements in these transactions enables individuals and businesses to navigate financial activities seamlessly and within legal frameworks.
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