Specified transactions where PAN is mandatory

The government has decided that quoting of PAN is mandatory for transactions of an amount exceeding Rs.2 lakh regardless of the mode of payment. 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.

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

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A chart highlighting the key changes to Rule 114B of the Income-tax Act is as under:

Sr. No. Nature of Transaction Existing provision New provision
1 Immovable property Sale/ purchase valued at Rs.5   lakh or more 1.       Sale/ purchase exceeding Rs.10 lakh2.       Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN.
2 Motor vehicle (other than two wheeler) All sales/purchases No Change
3 Time deposit Time deposit exceeding Rs.50,000/- with a banking company. 1.       Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN.2.       Deposits aggregating to more than Rs.5 lakh     during the year will also need PAN.
4 Deposit with Post Office Savings Bank Exceeding Rs.50,000/- Discontinued
5 Sale or purchase of securities Contract for sale/purchase of a value exceeding Rs.1 lakh. No Change
6 Opening an account (other than time deposit) with a banking company All new accounts 1.       Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts).2.       Co-operative banks also to comply.
7 Installation of telephone/ cellphone connections All instances Discontinued
8 Hotel/restaurant bill(s) Exceeding Rs.25,000/- at any one time (by any mode of payment) Cash payment exceeding Rs.50,000/-.
9 Cash purchase of bank drafts/ pay orders/ banker’s Amount aggregating to Rs.50,000/- or more on any one day Exceeding Rs.50,000/- on any one day
10 Cash deposit with banking company Amount aggregating to Rs.50,000/- or more on any one day Exceeding Rs.50,000/- on any one day
11 Foreign travel 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 of an amount exceeding Rs.50,000/- at any one time (including fare, payment to travel agent, purchase of forex)
12 Credit card Application to banking company/ any other company/institution for credit card No Change
13 Mutual fund units Payment of Rs.50,000/- or more for purchase Payment exceeding Rs.50,000/- for purchase
14 Shares of company Payment of Rs.50,000/- or more to a company for acquiring its shares 1.       Opening a demat account2.       Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction
15 Debentures/ bonds Payment of Rs.50,000/- or more Payment exceeding Rs.50,000/-
16 RBI bonds Payment of Rs.50,000/- or more Payment exceeding Rs.50,000/-
17 Life insurance premium Payment of Rs.50,000/- or more Payment exceeding Rs.50,000/-
18 Purchase of jewellery/bullion Payment of Rs.5 lakh or more at any one time or against a bill Deleted and merged with Sr. No. 19
19 Purchases or sales of goods or services No requirement Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction

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