Press
Information Bureau
Government of India
Ministry of Finance
15-December-2015
19:59 IST
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 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.
The changes to the Rules will take effect from 1st January, 2016.
The
above changes in the rules are expected to be useful in widening the tax net by
non-intrusive methods. They are also expected to help in curbing black money
and move towards a cashless economy.
A chart
highlighting the key changes to Rule 114B of the Income-tax Act is attached.
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.
|
