Specified Transactions To Come Into Force From 01.01.16
Amendment of Rules regarding quoting of PAN for specified transactions to come into force from 1st January, 2016
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, it is mandatory under Rule 114B of the Income-tax Rules to quote PAN where the transactions exceed a specified limit. In case of transactions of sale or purchase of goods and services, PAN will be required to be quoted, irrespective of the mode of payment if the transaction exceeds Rs. two lakhs.
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 amended Rule 114B to enhance the monetary limits of certain transactions which require quoting of PAN.
The changes made to the Rules have been notified through S.O. No. 3545(E) dated 30th December, 2015. These changes will take effect from 1st January, 2016.
The Notification is available on the website of the Department www.incometaxindia.gov.in.
A chart highlighting the key changes to Rule 114B of the Income-tax Act is attached.
NATURE OF TRANSACTION
MANDATORY QUOTING OF PAN (RULE 114B)
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.
Motor vehicle (other than two wheeler)
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
Deposit with Post Office Savings Bank
Sale or purchase of securities
Contract for sale/purchase of a value exceeding Rs.1 lakh
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
Installation of telephone/ cellphone connections
Exceeding Rs.25,000/- at any one time (by any mode of payment)
Cash payment exceeding Rs.50,000/-.
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.
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.
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)
Application to banking company/ any other company/institution for credit card
Co-operative banks also to comply.
Mutual fund units
Payment of Rs.50,000/- or more for purchase
Payment exceeding Rs.50,000/- for purchase.
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.
Payment of Rs.50,000/- or more to a company/ institution for acquiring its debentures/ bonds
Payment exceeding Rs.50,000/-.
Payment of Rs.50,000/-or more to RBI for acquiring its bonds
Payment exceeding Rs.50,000/-.
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.
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
Purchases or sales of goods or services
Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction.
Cash cards/ prepaid instruments issued under Payment & Settlement Act
Cash payment aggregating to more than Rs.50,000 in a year.