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Thursday, December 17, 2015

Rules regarding quoting of PAN for specified transactions amended

The Government is committed to curbing the circulation of black money and  widening of tax base. 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.

              One of the recommendations of the Special Investigation Team (SIT)  on Black Money was that quoting of PAN should be made mandatory for al l sales and purchases of goods and services where the payment exceeds  Rs.1 lakh. Accepting this recommendation, the Finance Minister made an  announcement to this effect in his Budget Speech. The Government has 
since received numerous representations from various quarters regarding the  burden of compliance this proposal would entail. Considering the representations,  it has been decided that quoting of PAN will be required for transactions of an  amount exceeding Rs.2 lakh regardless of the mode of payment.

             To bring a balance between burden of compliance on legitimate  transactions and the need to capture information relating to transactions  of higher value, the Government has also enhanced the monetary limits of  certain transactions which require quoting of PAN. The monetary limits have  now been raised to Rs. 10 lakh from Rs. 5 lakh for sale or purchase of immovable



Sl.
NATURE OF TRANSACTION
MANDATORY QUOTING OF PAN (RULE 114B)
Existing requirement
New requirement
1.
Immovable property
Sale/ purchase valued at Rs.5  lakh or more
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
No change
3.
Time deposit
Time deposit exceeding Rs.50,000/- with a banking company
i.      Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN;
ii.    Deposits aggregating to more than Rs.5 lakh   during the year will also need PAN
4.
Deposit with Post Office Savings Bank
Exceeding Rs.50,000/-
Discontinued
5.
Sale or purchase of securities
Contract for sale/purchase of a value exceeding Rs.1 lakh
No change
6.
Opening an account (other than time deposit) with a banking company.
All new accounts.
i. Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts);
ii. Co-operative banks also to comply
7.
Installation of telephone/ cellphone connections
All instances
Discontinued
8.
Hotel/restaurant bill(s)
Exceeding Rs.25,000/- at any one time (by any mode of payment)
Cash payment exceeding Rs.50,000/-.
9.
Cash purchase of bank drafts/ pay orders/ banker's cheques
Amount aggregating to Rs.50,000/- or more during any one day
Exceeding Rs.50,000/- on any one day.
10.
Cash deposit with banking company
Cash aggregating to Rs.50,000/- or more during any one day
Cash deposit exceeding Rs.50,000/- in a day.
11.
Foreign travel
Cash payment in connection with foreign travel  of an amount exceeding Rs.25,000/- at any one time (including fare, payment to travel agent, purchase of forex)
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)
12.
Credit card
Application to banking company/ any other company/institution for credit card
No change.
Co-operative banks also to comply.
13.
Mutual fund units
Payment of Rs.50,000/- or more for purchase
Payment exceeding Rs.50,000/- for purchase.
14.
Shares of company
Payment of Rs.50,000/-  or more to a company for acquiring its shares
i.      Opening a demat account;
ii.    Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction.
15.
Debentures/ bonds
Payment of Rs.50,000/- or more to a company/ institution for acquiring its debentures/ bonds
Payment exceeding Rs.50,000/-.
16.
RBI bonds
Payment of Rs.50,000/-or more to RBI for acquiring its bonds
Payment exceeding Rs.50,000/-.
17.
Life insurance premium
Payment of Rs.50,000/- or more in a year as premium  to an insurer
Payment exceeding Rs.50,000/- in a year.
18.
Purchase of jewellery/bullion
Payment of Rs.5 lakh or more at any one time or against a bill
Deleted and merged with next item in this table
19.
Purchases or sales of goods or services
No requirement
Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction.
20.
Cash cards/ prepaid instruments issued under Payment & Settlement Act
No requirement
Cash payment aggregating to more than Rs.50,000 in a year.


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 PIB

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