PRESS NOTE BY CBDT
Amendment of Rules regarding quoting of PAN for specified transactions
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 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 all 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 property, to Rs.50,000 from
Rs. 25,000 in the case of hotel or restaurant bills paid at any one time, and
to Rs. 1 lakh from Rs. 50,000 for purchase or sale of shares of an unlisted
company. In keeping with the Government's thrust on financial inclusion,
opening of a no-frills bank account such as a Jan Dhan Account will not require
PAN. Other than that, the requirement of PAN applies to opening of all bank
accounts including in co-operative banks.
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l.
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NATURE OF
TRANSACTION
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MANDATORY
QUOTING OF PAN (RULE 114B)
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Existing
requirement
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New
requirement
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1.
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Immovable property
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Sale/ purchase valued at Rs. 5 lakh or more
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i. Sale/
purchase exceeding Rs.10 lakh;
ii. Properties
valued by Stamp Valuation authority at amount
exceeding Rs.10 lakh will also need PAN.
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2
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Motor vehicle (other than two wheeler)
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All sales/purchases
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No change
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3.
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Time deposit
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Time deposit exceeding Rs. 50,000/- with
a banking company
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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
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4.
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Deposit
with Post Office Savings Bank
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Exceeding Rs.50,000/-
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Discontinued
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5.
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Sale or purchase of securities
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Contract for sale/purchase of a value exceeding Rs.1
lakh
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No change
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6.
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Opening an account
(other than time deposit)
with a banking company.
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All new accounts.
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i. Basic Savings
Bank Deposit Account excluded
(no PAN requirement for opening these accounts);
ii.
Co-operative banks also
to comply
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7.
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Installation of
telephone/ cellphone connections
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All instances
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Discontinued
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8.
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Hotel/restaurant bill(s)
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Exceeding Rs. 25,000/- at any one time (by any mode of
payment)
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Cash payment exceeding Rs. 50,000/-.
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9.
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Cash purchase of bank drafts/ pay orders/ banker's cheques
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Amount
aggregating to Rs.
50,000/- or more during any one day
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Exceeding Rs. 50,000/- on any one day.
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10.
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Cash
deposit with banking company
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Cash
aggregating to
Rs.50,000/- or more during any one day
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Cash deposit exceeding Rs.50,000/- in a day.
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11.
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Foreign travel
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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)
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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)
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12.
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Credit card
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Application
to banking company/ any other
company /institution for credit card
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No change.
Co-operative banks also to comply.
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13.
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Mutual fund units
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Payment of Rs.50,000/- or more for purchase
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Payment exceeding Rs.50,000/- for purchase.
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14.
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Shares of company
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Payment of Rs.50,000/- or more
to a company for acquiring its shares
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i. Opening a
demat account;
ii. Purchase or sale of shares of an unlisted company
for an amount exceeding Rs.1 lakh per transaction.
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15.
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Debentures/ bonds
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Payment of Rs.50,000/- or more to a company/
institution for acquiring its debentures/ bonds
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Payment exceeding Rs.50,000/-.
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16.
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RBI bonds
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Payment of Rs.50,000/- or more
to RBI for acquiring its bonds
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Payment exceeding Rs.50,000/-.
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17.
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Life insurance premium
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Payment of Rs.50,000/- or more
in a year
as premium to an insurer
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Payment exceeding Rs.50,000/- in a year.
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18.
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Purchase of jewellery/bullion
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Payment of Rs.5 lakh or more at any one time or against
a bill
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Deleted and merged with next item in this table
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19.
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Purchases or sales of goods or services
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No requirement
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Purchase/
sale of any
goods or services exceeding Rs.2
lakh per transaction.
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20.
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Cash
cards/ prepaid
instruments issued under Payment & Settlement Act
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No requirement
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Cash payment aggregating to more than Rs.50,000 in a
year.
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