Hunny Kuchhal

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.

Disclaimer: The contents of this article are for information purposes only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

(Republished with Amendments by Team Taxguru)

Author Bio

Qualification: Student - CA/CS/CMA
Company: Taxmancers
Location: Sonipat, Haryana, IN
Member Since: 18 Nov 2019 | Total Posts: 3
An Assiduous & Accountable Tax Professional practices in both direct Tax as well as GST. Also provides services related to ROC and Labour Law Matters. View Full Profile

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5 Comments

    1. hunny kuchhal says:

      It is always preferable to have the PAN on the invoice. But it is not mandatory. you just need to have the PAN of the party

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