Hunny Kuchhal
To collect information of certain types of transactions from third parties in a non-intrusive manner, the Income-tax Rules require quoting of Permanent Account Number (PAN) where the transactions exceed a specified limit. Persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity.
Quoting of PAN will be required for transactions of an amount exceeding Rs.2 lakh regardless of the mode of payment.
A chart highlighting the key changes to Rule 114B of the Income-tax Act is attached.
Sl. |
Nature of Transaction | Mandatory Quoting of Pan (Rule 114B) |
| 1. | Immovable property | i. Sale/ purchase exceeding Rs.10 lakh;
ii. Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN. |
| 2 | Motor vehicle (other than two wheeler) | All sales/purchases |
| 3. | Time deposit | i. Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN;
ii. Deposits Amount exceeding fifty thousand rupees or aggregating to more than five lakh rupees during a financial year will also need PAN |
| 4. | Sale or purchase of securities | Contract for sale/purchase of a value exceeding Rs.1 lakh |
| 5. | Opening an account (other than time deposit) with a banking company. | i. Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts);
ii. Co-operative banks also to comply |
| 6. | Hotel/restaurant bill(s) | Cash payment exceeding Rs.50,000/-. |
| 7. | Cash purchase of bank drafts/ pay orders/ banker’s cheques | Exceeding Rs.50,000/- on any one day. |
| 8. | Cash deposit with banking company | Cash deposit exceeding Rs.50,000/- in a day. |
| 9. | Foreign travel | 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) |
| 10. | Credit card | Application to banking company/ any other company/institution for credit card
Co-operative banks also to comply. |
| 11. | Mutual fund units | Payment exceeding Rs.50,000/- for purchase. |
| 12. | Shares of company | i. Opening a demat account;
ii. Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction. |
| 13. | Debentures/ bonds | Payment exceeding Rs.50,000/-. |
| 14. | RBI bonds | Payment exceeding Rs.50,000/-. |
| 15. | Life insurance premium | Payment exceeding Rs.50,000/- in a year. |
| 16. | Purchases or sales of goods or services | Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction. |
| 17. | Cash cards/ prepaid instruments issued under Payment & Settlement Act | Cash payment aggregating to more than Rs.50,000 in a year. |
Some Important Notes:
♥ In case any person, entering into these transactions is minor, he shall quote PAN of Guardian.
♥ In Case any person , does not have a PAN, he shall make a declaration in Form No. 60 (Copy Enclosed) giving the particulars of Such Transactions.
♥ Every person who is required to get his accounts audited U/s 44AB of the Act,shall furnish a statement in Form 61 containing the particulars of the Form 60 obtained.
♥ Forms 60 obtained to be retained for a period of 6 Years from the end of financial year in which the transaction was undertaken.
♥ Details of Form 60 received by 31st March, to be furnished by 30th April & Form 60 received by 30th September, to be furnished by 31st October in Form 61.
Penalty for non-furnishing of Statement will be of Rs. 100 per day of default.
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(Republished with Amendments by Team Taxguru)
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Nice Article
Some positive steps to curb black money and parallel economy will do well in coming years
Does point 3 means both seller and buyer of goods/ services PAN should be quoted in the invoice/ bill generated?
Form 61A need to be filled for the financial year 2015-16 as well in accordance with Income Tax 7th (Amendment) Rules.