List of transactions in which quoting PAN card is mandatory
Cases in which submission of PAN is mandatory
In this post, We’ll talk about situations where submitting a PAN is mandatory. Where we will take a close look at each section in detail:
Introduction
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.
Cases in which submission of 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 exceeding Rs 50000 per day or more than 5,00,000 during a Financial year |
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 |
NRI PAN mandatory transaction list
SL.No. | Nature of Transactions | Value of Transactions |
1 | Sale or purchase of a motor vehicle or vehicle, which requires registration by a registering authority under chapter VI of the Motor Vehicles Act. 1988, OTHER THAN TWO WHEELERS | All such Transactions |
2 | Opening an account with a Bank(Other than a savings bank account) | All such Transactions |
3 | Opening a Demat account | All such Transactions |
4 | Payment to a company for purchasing debentures or bonds issued by it | payment exceeding Rs. 50,000 |
5 | Payment to Mutual Fund for purchase of its units | payment exceeding Rs. 50,000 |
6 | Deposit with a Bank | Deposit or more than RS. 50,000(if in cash) per day |
7 | Time deposit with a Bank, Post Office, Nidhi companies, NBFCs | Amount of more than RS. 50,000 per day or more than RS. 5,00,000 during a financial year |
8 | Payment for Life insurance premium | Payment exceeding RS. 50,000 in a financial year |
9 | Sale or purchase of securities (other than shares) | Amount exceeding RS. 1,00,000 per transaction |
10 | Sale or purchase of unlisted shares | Amount exceeding RS. 1,00,000 per transaction |
11 | Sale or purchase of any immovable property | Amount of more than RS. 10,00,000 or if valued by stamp valuation authority, an amount of more than Rs. 10,00.000 |
Penalty for non-quoting of PAN (Section 272B) – if a person fails to comply with the requirement of quoting the PAN or furnish incorrect PAN then Assessing Officer may levy the penalty of RS. 10,000.
Key notes:
- 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 a transaction who does not have a PAN, should file Form No.60. So, 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 a banking company / cooperative bank to which the Banking Regulation Act applies and does not submit his PAN or Form No. 60 needs to provide it on or before the 30th day of June.
- “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.
