Hello, in this post we have made a compiled list of various scenarios where PAN is mandatory.
To restrain the circulation of black money and to increase the tax base, the government has recently updated the conditions for which PAN details are mandatory. This will be applicable for transactions that exceed a certain specified limit.
These changes came into effect as per the Special Investigation Team (SIT). SIT made PAN details mandatory for all sale or purchase of goods and services which exceed 1 lakh.
If you do not have a PAN then you need to fill out a form to establish your identity.
List of transactions in which quoting PAN is mandatory
The table below highlights the transactions for which PAN is made mandatory as per Rule 114B of the Income Tax Act.
|SL.No.||Nature of Transactions||Value of Transactions|
|1.||Sale or purchase of a motor vehicle (not two-wheeler)||All such transactions|
|2.||Opening an account [other than a time-deposit and a Basic Savings Bank Deposit Account] with a bank/ co-operative bank||All such transactions|
|3.||Making an application to a bank/co-operative bank/ other company or institution, to issue a credit/debit card||All such transactions|
|4.||Opening of a Demat account||All such transactions|
|5.||Bill payment in hotel/restaurant at any one time||Payment in cash of an amount exceeding Rs. 50,000|
|6.||Payment made to travel in any foreign country or purchase of any foreign currency at any one time.||Payment made in cash which exceeds 50,000.|
|7.||Payment to purchase the units of a Mutual Fund||Amount exceeding Rs. 50,000|
|8.||Payment to a company or an institution to acquire their debentures/bonds||Amount exceeding Rs. 50,000|
|9.||Payment to the RBI to acquire their bonds||Amount exceeding Rs. 50,000|
|10.||Deposit with a bank/co-operative bank or Post Office||Cash deposit exceeds 50,000 in a day or exceeds Rs. 2,50,000 during November 9, 2016, and December 30, 2016|
|11.||Purchase of bank drafts/pay orders/banker’s cheques from a bank/co-operative bank||If the payment amount is over 50,000 in a day|
|12.||A time deposit with bank/co-operative bank/post office/Nidhi/non-banking financial company||If the amount is above 50,000 or aggregate is more than 5 lakh in an FY.|
|13.||Payment for one or more pre-paid payment instruments issued by RBI to a bank/co-operative bank/any other company or institution||Payment in cash or by bank draft/pay order/banker’s cheque of an amount aggregating to more than 50,000 in an FY|
|14.||Payment as life insurance premium to an insurer||The aggregate amount is more than 50,000 in an FY|
|15.||A contract for sale or purchase of securities (other than shares)||Amount exceeds 1 lakh per transaction|
|16.||Sale/purchase, by any person, of shares in a company not listed in a recognised stock exchange||If the amount exceeds1 lakh per transaction|
|17.||Sale/ purchase of any immovable property||Amount exceeding 10 lakh or valued by stamp valuation authority referred to in Section 50C at an amount exceeding 10 lakh|
|18.||Sale/ purchase, by any person, of goods or services of any nature other than those specified at Sl. Nos. 1 to 17 above||Amount exceeding Rs. 2 lakh per transaction|
- Where a person doing the transaction is a minor and does not have chargeable income then he can use his father or mother or guardian’s PAN.
- Any person doing transaction does not have a PAN, he should file Form No.60. So, the transaction details are in paper form or electronically under EVC. It is according to procedures, data structures, and standards specified by the Principal Director General of Income Tax (Systems) or Director General of Income Tax (Systems).
- This provision is not applicable to the following:
- The Central Government, the State Governments and the Consular Offices;
- The non-residents referred in clause (30) of Section 2.
- When a person has an account (not time deposit and basic saving account) in banking company / cooperative bank to which the Banking Regulation Act applies and not submit his PAN or Form No. 60 needs to provide it on or before February 28th, 2017.
- “Payment in connection with travel” – payment made for fare, travel agent/tour operator, or to an authorised person as in clause (c) of Section 2 of the Foreign Exchange Management Act, 1999.
- “Travel agent or tour operator” -the person who arranges for air, surface or sea travel /provides services like accommodation, tours, entertainment, passport, visa, foreign exchange, travel-related insurance or other services either out or in of tour package;
- “time deposit” means a deposit repayable after a fixed period expires.
With that, we have come to an end of this post on cases where PAN is made mandatory. Share your views and opinions with us in the comments section below.