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Amendment in Rules regarding quoting of PAN for specified transactions

The Rules regarding quoting of PAN for specified transactions has been amended in order to curb 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. However, persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity.

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.
As per the key changes to Rule 114B of the Income-tax Act (Mandatory Quoting of PAN) the present requirements are:-

1. Immovable property - Sale/ purchase exceeding Rs.10 lakh; and Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN.

2. Time deposit - Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN; and Deposits aggregating to more than Rs.5 lakh during the year will also need PAN

3. Opening an account (other than time deposit) with a banking company - Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts); and Co-operative banks also to comply

4. Hotel/restaurant bill(s) - Cash payment exceeding Rs.50,000/-

5. Cash purchase of bank drafts/ pay orders/ banker's cheques - Exceeding Rs.50,000/- on any one day

6. Cash deposit with banking company - Cash deposit exceeding Rs.50,000/- in a day

7. Foreign travel - 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)

8. Mutual fund units - Payment exceeding Rs.50,000/- for purchase

9. Shares of company - Opening a demat account; and Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction

10. Debentures/ bonds - Payment exceeding Rs.50,000/-

11. RBI bonds - Payment exceeding Rs.50,000/-

12. Life insurance premium - Payment exceeding Rs.50,000/- in a year

13. Purchases or sales of goods or services - Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction

14. Cash cards/ prepaid instruments issued under Payment & Settlement Act - Cash payment aggregating to more than Rs.50,000 in a year
The new Rules have taken effect from 1st January, 2016

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