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.

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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.

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.


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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.

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