Transactions where Quoting of PAN is mandatory
A permanent Account Number (PAN) is a very important tax identity proof as applicable in India. It is a ten-digit alphanumeric number that is compulsory for filing of income tax return. Besides return filing, the Government has made it mandatory to quote PAN in case of various financial transactions. The reason and intention behind this are to curb the circulation of black money & identifying the cases of tax evasion.
Accordingly, as per Rule 114B of Income Tax Rules, every person shall quote his PAN in all documents pertaining to the transactions specified under this rule. In this article, we have elaborated on the list of transactions where quoting PAN has been made mandatory by the Government. Let’s check out…
Transactions where quoting of PAN is mandatory
Following are the transactions in which quoting of PAN is mandatory by every person except the Central Government, the State Governments, and the Consulate Offices:
|
Sr. No. |
Nature of Transactions |
Threshold value of Transactions |
|
1 |
Sale or purchase of a motor vehicle other than two-wheeled vehicles |
In all cases |
|
2 |
Opening an account [other than a time-deposit referred to at point no. 12 and a Basic Saving Bank Deposit Account] with a banking company or a cooperative bank |
In all cases |
|
3 |
Making an application for the issue of a credit card or a debit card |
In all cases |
|
4 |
Opening of a Demat account with a depository, participant, custodian of securities, or any other person with SEBI |
In all cases |
|
5 |
Payment in cash to a hotel or restaurant against a bill or bills at any one time |
Payments exceeding Rs, 50,000 |
|
6 |
Payment in cash in connection with travel to any foreign country or payment for the purchase of any foreign currency at any one time |
Payment exceeding Rs. 50,000 |
|
7 |
Payment to a Mutual Fund for the purchase of its units |
Payment exceeding Rs. 50,000 |
|
8 |
Payment to a company or an institution for acquiring debentures or bonds issued by it |
Payment exceeding Rs. 50,000 |
|
9 |
Payment to Reserve Bank of India for acquiring bonds issued by it |
Payment exceeding Rs. 50,000 |
|
10 |
Cash deposits exceeding Rs. 50,000 during one day with a banking company or co-operative bank or post office |
Cash Deposits exceeding Rs. 50,000 |
|
11 |
Payment in cash for the purchase of bank drafts or pay orders or banker’s cheques from a banking company or a co-operative bank during one day |
Payment exceeding Rs. 50,000 |
|
12 |
Time deposit with a:
|
Amount exceeding Rs. 50,000 or aggregating to more than Rs. 5 Lakhs during a financial year |
|
13 |
Payment for one or more pre-paid instruments, as defined in the policy guidelines for issuance and operation of pre-paid payment instruments issued by RBI u/s 18 of the Payment and Settlement Systems Act, 2007 to a banking company or a co-operative bank or to any other company or institution |
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 |
|
14 |
Payment towards life insurance premium to a life insurance company |
Payment exceeding Rs. 50,000 in a financial year |
|
15 |
A contract for the sale or purchase of securities (other than shares) |
Amount exceeding Rs. 1 Lakh per transaction |
|
16 |
Sale or purchase, by any person, of shares of a company, not listed on a recognized stock exchange |
Amount exceeding Rs. 1 Lakh per transaction |
|
17 |
Sale or purchase of any immovable property |
Amount exceeding Rs. 10 Lakhs or valued by stamp valuation authority referred in section 50C at an amount exceeding Rs. 10 Lakhs |
|
18 |
Sale or purchase of goods or services of any nature other than those specified above |
Amount exceeding Rs. 2 Lakhs per transaction |
Frequently Asked Questions
Whose PAN shall be quoted in case of a minor?
In the case of a minor, the PAN of his father or mother, or guardian shall be quoted provided he does not have any income chargeable to income tax.
What should be done where the person does not have a PAN?
In the case of any person, who does not have PAN and enters into any of the above transactions, he can make a declaration in Form No. 60 giving therein the particulars of such transaction.
Is it compulsory for non-residents to quote PAN as per Rule 114B?
In the case of non-residents, quoting of PAN is not mandatory for transactions referred to in point no. 3 or 5 or 6 or 9 or 11 or 13 or 18.
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