Obtaining a Permanent Account Number (PAN) is mandatory under specific circumstances and for certain financial transactions. Individuals and entities whose total income exceeds the basic exemption limit must apply for a PAN by May 31 of the assessment year. Additionally, resident non-individuals engaged in financial transactions of Rs. 2,50,000 or more in a financial year, along with their key personnel (such as directors or partners), must also obtain a PAN by the same deadline. Businesses with a turnover likely to exceed Rs.5,00,000 in a previous year are required to apply for a PAN before the end of that year. A PAN is also a prerequisite for specific high-value transactions, including cash deposits or withdrawals of Rs.20,00,000 or more in a financial year, opening a current account, and purchasing or selling immovable property valued at Rs.10,00,000 or more. Quoting a PAN is also mandatory for a range of other transactions, such as time deposits and cash payments exceeding Rs.50,000 for hotel bills, foreign travel, or mutual fund purchases. For any sale or purchase of goods or services exceeding Rs.2,00,000 per transaction, a PAN must be furnished. Read out this article to know the circumstances when obtaining PAN is mandatory and also the cases where the said PAN is required to be furnished.
| Sl. | Particulars | Requirements for PAN |
| 1 | a) Every person if his total income or the income clubbed in his income exceeds basic exemption limit
b) Resident (non-individual) which enter into financial transaction aggregating to Rs.2,50,000 or more in a FY c) MD, director, partner, trustee, author, founder, karta, CEO, officer of person in b) above |
Apply for PAN up to 31st May of the AY |
| 2 | Every person carrying on business or profession whose turnover is likely to exceed Rs.5,00,000 in a PY | Apply for PAN up to end of PY |
| 3 | a) cash withdraw or deposit (each) of Rs.20,00,000 or more in a FY
b) Opening current account, cash credit |
Apply for PAN atleast 7 days before the intended date of transaction |
| 4 | Certain transaction in which quoting of PAN is mandatory | a) Sale or purchase of any immovable property whose value or SDV is Rs.10,00,000 or more
b) A time deposit with a bank/Nidhi company/NBFC/post office exceeding Rs.50,000 or aggregating to more than Rs.5,00,000 during a financial year c) A contract of a value exceeding Rs.1,00,000 for sale or purchase of securities d) Sale or purchase, by any person, of shares of a company not listed in a recognised stock exchange of an amount exceeding Rs.1,00,000 per transaction. e) Payment to hotels and restaurants against their bills for an amount exceeding Rs.50,000 at any one time f) Payment in cash for purchase of bank draft or pay orders or banker’s cheque for an amount Rs.50,000 or more during any one day g) Deposit in cash aggregating Rs.50,000 or more during one day with a bank h) Payment in cash in connection with travel to any foreign country of an amount exceeding Rs.50,000 at any one time i) Payment in cash for purchase of any foreign currency of an amount exceeding Rs.50,000 at any one time. j) Payment of an amount of Rs.50,000 or more to a Mutual Fund for purchase of units or to a company for acquiring shares or debentures or bonds issued by it k) Payment of an amount of Rs.50,000 or more to RBI for acquiring bonds issued by it l) Payment in cash or by way of a bank draft or pay order or banker’s cheque of an amount aggregating to more than Rs. 50,000 in a financial year for one or more pre-paid payment instruments issued by RBI to a banking company or a co-operative bank or to any other company or institution. m) Payment of an amount of Rs. 50,000 or more in a year as life insurance premium to an insurer n) Payment for sale or purchase of goods or services of any nature [other than those specified above in Point No. (a) to (m)] of an amount exceeding Rs.2,00,000 per transaction. |
Author Bio
