New Rules regarding quoting of PAN for specified transactions

To gather details of certain types of transactions from 3rd parties in a non-intrusive way, the Income-tax Guidelines require estimating of Permanent Account Number (PAN) where the transactions surpass a defined limitation. Individuals who do not hold PAN are needed to fill a type and provide any one of the defined documents to develop their identity.

One of the suggestions of the Special Investigation Group (SIT) on Black Money was that quoting of PAN should be made mandatory for all sales and purchases of products and services where the payment goes beyond Rs.1 lakh. Accepting this recommendation, the Finance Minister made a statement to this effect in his Budget plan Speech. The Federal government has because received numerous representations from various quarters regarding the burden of compliance this proposition would require. Thinking about the representations, it has actually been chosen that pricing quote of PAN will be needed for deals of a quantity exceeding Rs.2 lakh despite the mode of payment.

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5 lakh for sale or purchase of immovable home, to Rs.50,000 from Rs. 25,000 in the case of hotel or dining establishment expenses paid at any one time, and to Rs.

The modifications to the Rules will take effect from 1^st January, 2016.

The above modifications in the guidelines are anticipated to be helpful in widening the tax internet by non-intrusive techniques. They are likewise expected to assist in curbing black money and move towards a cashless economy.

A chart highlighting the crucial changes to Guideline 114 B of the Income-tax Act is attached.

Sl.	NATURE OF TRANSACTION	MANDATORY QUOTING OF PAN (RULE 114 B)
Existing requirement	New requirement
1.	Immovable property	Sale/ purchase valued at Rs.5 lakh or more	i. Sale/ purchase surpassing Rs.10 lakh;. Residence valued by Stamp Evaluation authority at amount surpassing Rs.
2	Motor car (other than 2 wheeler)	All sales/purchases	No change
3.	Time deposit	Time deposit surpassing Rs.	Deposit with Post Workplace Cost Savings Bank	Going Beyond Rs.50,000/-	Ceased
5.	Sale or purchase of securities	Agreement for sale/purchase of a worth surpassing Rs.1 lakh	No change
6.	Setup of telephone/ mobile phone connections	All instances	Discontinued
8.	Hotel/restaurant expense( s)	Surpassing Rs.	Credit card	Application to banking company/ any other company/institution for credit card	No modification. Co-operative banks also to comply.
13	Shared fund systems	Payment of Rs.50,000/- or more for purchase	Payment exceeding Rs.50,000/- for purchase.
14	Shares of business	Payment of Rs.50,000/- or more to a company for getting its shares	i. Opening a demat account;. ii. Purchase or sale of shares of an unlisted business for an amount exceeding Rs.1 lakh per transaction.
15	Debentures/ bonds	Payment of Rs.50,000/- or more to a business/ institution for acquiring its debentures/ bonds	Payment going beyond Rs.50,000/-.
16	RBI bonds	Payment of Rs.50,000/- or more to RBI for obtaining its bonds	Payment exceeding Rs.50,000/-.
17	Life insurance coverage premium	Payment of Rs.50,000/- or more in a year as premium to an insurance company	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 versus 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 going beyond Rs.2 lakh per transaction.
20	Cash cards/ pre-paid instruments issued under Payment & Settlement Act	No requirement	Money payment aggregating to more than Rs.50,000 in a year.