Transactions which require quoting of PAN mandatory

PAN mandatory: Permanent Account Numbers, or PANs, are distinct 10-digit alphanumeric identifiers issued by the Income Tax Department on behalf of the Central Board of Direct Taxes. All individuals who are subject to a particular tax slab are required to possess a PAN card.

This document serves as additional identification. For taxable salaries, professional fees, buying mutual funds, assets over certain thresholds, and other financial transactions, it is necessary.

Read also: PAN Card Correction/Update Online: Change Name, Address, DOB and Mobile Number in PAN card

Changes in PAN Card Transactions

PAN card transactions have undergone some modifications due to the actions of the Indian government. These adjustments are applicable to various financial transactions exceeding Rs 2 lakh and take effect on January 1st, 2016. The following goals account for the modifications that have been made:

S.No Transactions specified in rule 114B PAN is Mandatory
1 Sale or purchase of a motor vehicle (other than two wheeler) All such transactions
2 Opening an account with a bank/co-operative bank All such transactions
3 Making an application for issue of a credit or debit card All such transactions
4 Opening of a demat account All such transactions
5 Payment to a hotel or restaurant at any time Cash Payment exceeding Rs 50,000
6 Payment for travel to any foreign country or purchase of any foreign currency at any time Cash Payment exceeding Rs 50,000
7 Payment to Mutual Fund for purchase units Amount exceeding Rs 50,000
8 Payment to a company or an institution for acquiring debentures/bonds Amount exceeding Rs 50,000
9 Payment to the RBI for acquiring bonds issued by it Amount exceeding Rs 50,000
10 Deposit with a bank/co-operative bank or Post Office Cash deposit exceeding Rs 50,000 during any 1 day
11 Purchase of bank drafts/pay orders/banker’s cheques from a bank/co-operative bank Payment exceeding Rs 50,000 during any 1 day
12 A time deposit with bank/co-operative bank/ post office/ Nidhi/non-banking financial company Amount exceeding Rs 50,000 or aggregating to more than Rs 5,00,000 during a financial year
13 Payment for one or more pre-paid payment instruments to a bank/co-operative bank/any other company or institution Payment in cash or by way of a bank draft /pay order/banker’s cheque for more than Rs 50,000 in a financial year
14 Payment as life insurance premium Amount exceeding Rs 50,000 in a financial year
15 A contract for sale or purchase of securities (other than shares) Amount exceeding Rs. 1,00,000 per transaction
16 Sale or purchase of shares in a company not listed in a recognised stock exchange Amount exceeding Rs. 1,00,000 per transaction
17 Sale or purchase of any immovable property Amount exceeding Rs 10,00,000 or valued by stamp valuation authority referred to in section 50C at an amount exceeding Rs 10,00,000
18 Sale or purchase of goods or services of any nature other than those specified above Amount exceeding Rs 2,00,000 per transaction

Exceptions to the PAN rule:​

  1. According to Income Tax Department regulations, you are permitted to complete any of the aforementioned transactions even if you do not have a PAN card as long as you sign Form 60 attesting to this fact and stating that your income is below the taxable limit.
  2. A parent or guardian’s PAN card number may only be provided by a minor if that person does not have any taxable income.
  3. NRIs get relaxation in quoting PANs in some cases.
  4. Rule 114B states that PAN card numbers are not needed to be mentioned by the federal government, state governments, or consular offices.
  5. The non-residents referred to in clause (30) of section 2 of the Act in respect of the transactions other than a transaction referred to at Sl. No. 1 or 2 or 4 or 7 or 8 or 10 or 12 or 14 or 15 or 16 or 17 of the Table.
Read also: NRI can still file ITR using inoperative PAN?

Penalty For Contravention

Section 272B defines the penalty for contravention of above rules.

  1. If a person who is required to collect PAN is unable to do so, Assessing officer may impose penalty of Rs. 10,000.
  2. If a person who is required to quote his PAN quotes a false PAN, Assessing officer may impose penalty of Rs. 10,000.

Assessing officer is required to give an opportunity to being heard before imposing any penalty.

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