Furnishing PAN & AIR Information w.e.f 01-01-2016

In case of non resident, requirement of quoting PAN/Form 60 shall apply for following transactions only:

i) Sale or Purchase of motor vehicle

ii) Sale or purchase of any immovable property

iii) Purchase of debentures/ bonds from issuing Compnay for amount > Rs. 50,000

iv) Purchase of units from issuing Mutual fund for amount > Rs. 50,000

v) Cash deposit exceeding Rs. 50000 in any one day with banking company or co-operative bank.

vi) Time Deposits With Banking Company or Co-operative Bank , Post Office,Nidhi, NBFC for amount exceeding Rs. 50000 or aggregating to more than five lacs during financial year

vii) Opening of account with banking company or co-operative bank (other than time deposits and basic saving accounts).

viii) Opening of Demat Account.

ix) Contract for sale or purchase of securities (other than shares) for amount exceeding Rs. One lakh per transaction

x) Sale or purchase of unlisted shares of a company for amount exceeding Rs. One lakh per transaction

xi) Payment of LIP aggregating more than Rs. 50,000 during financial year.

In Old rules, there was blanket exemption available to non resident from quoting PAN/providing declaration in F.60

1. Only Motor Vehicle covered by section 2(28) of Motor Vehicle Act 1988 and requiring registration by registering authority are covered which means that

a) Vehicle for use upon roads only shall require quoting of PAN. Air, Water vehicle are not covered.

b) Only mechanically propelled vehicles are covered. Manually propelled vehicle shall therefore stand excluded.

c) Vehicles running upon fixed rails are not covered

d) Vehicles of special type adapted for use in factory or any other enclosed premises are not covered.

e) Motor Vehicle shall include includes a chassis to which a body has not been attached and a trailer

f) Vehicles having lesser than four wheels and fitted with not more than 25CC engine are not covered.

g) All types of two wheeled vehicles like scooter, motor cycle etc are specifically excluded even if covered by definition of motor vehicle

2. In pre amended rules, two wheeled vehicles, inclusive of any detachable side-car having an extra wheel, attached were excluded. Amended rules though silent about detachable side car might still include two wheeled vehicles with detachable side cars.

3. In pre amended Rules, a registering authority as well as buyer and seller were required to ensure that document pertaining to sale or purchase contain PAN or that F.60 is obtained from other party failing such compliance.

4. However in amended Rules only seller is required to ensure that PAN is quoted on document obtained by him from the buyer and if PAN of the buyer is not available Form 60 shall be obtained from the buyer.

5. All eligible transactions irrespective of monetary limit are covered.

1. PAN to quoted for transaction exceeding Rs. 10 lacs. Also PAN to be quoted for transactions valued at more than ten lacs by stamp valuation authority, even if actual transaction is for lesser amount. [Older limit was Rs. 5 lacs]

2. However the transactions for which valuation by stamp authority is not required like leasehold rights, the amended rules may not applicable if actual transaction amount is ten lacs or less. Section 50C is not applicable to such transactions as per ITAT Mumbai in Atul G. Puranik and ITAT Pune in Kancast (P) Ltd.

3. In case of gifts, wills, trusts, power of attorney transactions since no sale or purchase is involved, R. 114B might not apply

4. Immovable Property is not defined in Income tax Act but as per General Clauses Act “Immovable property” shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth.

5. Agricultural Land shall also be included. However whether transactions of bayana sale shall also be covered is a moot point.

6. In pre amended Rules, a registering authority as well as buyer and seller were required to ensure that document pertaining to sale or purchase contain PAN or that F.60 is obtained from other party failing such compliance. However in amended rules, obligation is caste upon registering authority and seller only.

7. AIR Information of sale or purchase of immovable property for an amount of thirty lakh rupees or more or valued by the stamp valuation authority referred to in section 50C of the Act at thirty lakh rupees or more to be furnished by registration authority. In earlier Rule there was no requirement to send AIR Information where value exceeded Rs. 30 lacs on basis of valuation of stamp duty authority and not otherwise.

For General Transactions of Sale or Purchase of Goods or Services of any nature PAN to be quoted where amount exceeds Rs. Two lacs per transaction excluding following transactions :

a) Sale or purchase of motor vehicle where PAN to be quoted irrespective of amount

b) Sale of purchase of immovable property where PAN to be quoted for amount exceeding 10 lacs.

c) Sale or Purchase of Securities (other than shares) where PAN to be quoted for transactions exceeding Rs. One lac.

d) Sale of purchase of shares of unlisted Company where PAN to be quoted for transactions exceeding Rs. One lac.

e) Purchase of foreign currency in cash where PAN to be quoted for payment exceeding Rs. 50000 at any one time.

f) Purchase of units of Mutual funds from issuing mutual fund where PAN to be quoted for payment exceeding Rs. 50000.

g) Purchase of debentures or bonds from issuing company where PAN to be quoted for payment exceeding Rs. 50000

h) Purchase of RBI Bonds from RBI where PAN to be quoted for payment exceeding Rs. 50000

i) Payment in cash for services to Hotel or restaurant against a bill exceeding Rs. 50,000 at any one time.

j) Payment in cash for services in connection with foreign travel exceeding Rs. 50000 at any time.

1. Limit of two lacs shall apply whether transaction is conducted in cash or cheque. However for payments to Hotel, restaurants, payments for foreign travel, foreign exchange while limit for cash transactions is Rs. 50,000 , limit for non cash transactions only shall be two lacs.

2. It may also be pertinent to mention that at present u/s 206C(1D) TCS @ 1% required to be collected by seller for cash transactions only exceeding 2 lacs for bullion and exceeding 5 lacs for jewellery. Earlier requirement of quoting PAN where payment to dealer for amount equivalent and greater than 5 lacs(both cash and non cash) for purchase of bullions and jewellery is made done away and rather reduced to Rs. 2 lacs.

3. U/R 114C(2) , seller issuing bill to ensure after verification that PAN has been correctly furnished and mentioned in the document or that F.60 has been duly furnished with complete particulars where PAN is not available.

4. However all such sellers are not required to electronically furnish data about F. 60 to the department and it is only where audit is required u/s 44AB (including audit for presumptive taxation) that data is required to be furnished electronically in F. 61 besides retaining F.60 for six years from end of financial year (not assessment year) in which transaction is under taken. E.g. transaction for AY 2016-17 is undertaken in FY 2015-16, then F 60 to be retained till 31-03-2022.

5. Sale or purchase by non residents under this category and sale or purchase by Central Government , State Government and Consular Offices is outside the purview of this Rule and therefore requirement of quoting PAN shall not apply. However this exemption is not available for Local authorities, Improvement Trust, Development Boards.

6. Term service not defined under income tax law. Renting of immovable property is a declared service under service tax law for charging service tax but whether the same concept shall apply in income tax law is again a moot point. Employee providing his services to employer on the other hand is outside the purview of service tax law. Financial services like interest are also outside the purview of service under service tax law. Hence term service might need a little clarification.

7. AIR Information regarding receipt of cash payment exceeding two lakh rupees for sale, by any person, of goods or services of any nature to be furnished by any person who is liable for audit under section 44AB of the Act. Earlier no such AIR Information was required to be furnished.

Payment in cash to Hotel or restaurant against a bill or bills exceeding Rs. 50,000 at any one time:

1. If payment not exceeding Rs. 50,000 in cash is made at more than one time although cumulatively exceeding Rs. 50,000, requirement of quoting PAN may be obviated.

2. If there are multiple bills and payment is made against all of them at one time exceeding Rs. 50,000, the requirement of quoting PAN shall apply.

3. For payment through credit card, debit card, cheque, draft , RTGS quoting of PAN shall be required only if amount per transaction exceeds Rs. 2 lacs. Raising separate bills against separate services shall constitute separate transactions.

8. U/R 114C(2) , Hotel or restaurant issuing bill to ensure after verification that PAN has been correctly furnished and mentioned in the document or that F.60 has been duly furnished with complete particulars where PAN is not available.

9. However all such Hotels or restuarants are not required to electronically furnish data about F. 60 to the department and it is only where audit is required u/s 44AB (including audit for presumptive taxation) that data is required to be furnished electronically in F. 61 besides retaining F.60 for six years from end of financial year (not assessment year) in which transaction is under taken. E.g. transaction for AY 2016-17 is undertaken in FY 2015-16, then F 60 to be retained till 31-03-2022.

10. Old Limit was Rs. 25000 which has been enhanced to Rs. 50,000.

11. In earlier Rules, limit of Rs. 25000 applied to non cash transactions also, however the enhanced limit of Rs. 50,000 is applicable to cash transactions only.

Payment in cash in connection with travel to any foreign country or purchase of foreign currency exceeding Rs. 50,000 at any onetime :

1. Payment in connection with travel includes payment to a travel agent or a tour operator (who makes arrangements for air, surface or maritime travel or provides services relating to accommodation, tours, entertainment, passport, visa, foreign exchange, travel related insurance or other travel related services either severally or in package). Payment for foreign currency also separately covered. Foreign currency however gets covered under foreign exchange as per FEMA.

2. Payment in connection with travel includes payment to authorized person defined in FEMA (money changer not covered).

3. Payment in connection with travel includes payment towards fare.

4. In older Rules, travel to foreign country excluded travel to neighboring country and specified places of pilgrimage. However this distinction has been done away in new Rules and travel to neighboring countries requiring payment exceeding Rs. 50,000 in cash shall now require quoting of PAN.

4. If payment not exceeding Rs. 50,000 in cash is made at more than one time although cumulatively exceeding Rs. 50,000, requirement of quoting PAN may be obviated.

5. For payment through credit card, debit card, cheque, draft , RTGS quoting of PAN shall be required only if amount per transaction exceeds Rs. 2 lacs.

6. U/R 114C(2) , person issuing any document for foreign travel fare or travel agent or tour operator issuing bill to ensure after verification that PAN has been correctly furnished and mentioned in the document or that F.60 has been duly furnished with complete particulars where PAN is not available.

7. However all such person issuing any document for foreign travel fare or travel agent or tour operator are not required to electronically furnish data about F. 60 to the department and it is only where audit is required u/s 44AB (including audit for presumptive taxation) that data is required to be furnished electronically in F. 61 besides retaining F.60 for six years from end of financial year (not assessment year) in which transaction is under taken. E.g. transaction for AY 2016-17 is undertaken in FY 2015-16, then F 60 to be retained till 31-03-2022.

8. Old Limit was Rs. 25000 which has been enhanced to Rs. 50,000.

9. In Earlier Rules, limit of Rs. 25000 applied to cash payment only, and enhanced limit of Rs. 50,000 is also applicable to cash transactions only.

10. AIR Information regarding Receipt from any person for sale of foreign currency including any credit of such currency to foreign exchange card or expense in such currency through a debit or credit card or through issue of travellers cheque or draft or any other instrument of an amount aggregating to ten lakh rupees or more during a financial year to be furnished by authorized person under FEMA.

In above cases, buyer or seller is not required to ensure quoting of PAN/furnishing of F.60 but depository, participant, custodian of securities in case of demat accounts, principal officer of the company in case of transactions in securities(other than shares) and unlisted shares, trustee of Mutual Fund , Officer of RBI to ensure correct and quoting of PAN/obtention of F.60

Non residents also required to furnish PAN/Form 60 in all above cases except for purchase of RBI Bonds because RBI Bonds are not available to non residents for investment.

AIR Information regarding Receipt from any person of an amount aggregating to ten lakh rupees or more in a financial year for acquiring shares (including share application money) issued by the company to be furnished . Earlier limit was Rs. One lakh per transaction and share application money was not included

AIR Information regarding Buy back of shares from any person (other than the shares bought in the open market) for an amount or value aggregating to ten lakh rupees or more in a financial year to be furnished by listed company buying back its shares.

Earlier R. 114 B was applicable to banking Companies,Co-operative Banks were not covered. However wef 01-01-2016, co-operative banks have been specifically roped in for all specified banking transactions here in :

Manager or officer of banking company or cooperative bank, post master, principal officer of company or institution shall ensure quoting of correct PAN on documents received or obtention of F.60