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Mentioning PAN For The Banking And Monetary Transaction

Mentioning PAN For The Banking And Monetary Transaction 

PAN For The Banking And Monetary Transaction  : The Government is committed to curbing 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. Persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity.

PAN For The Banking And Monetary Transaction  : One of the recommendations of the Special Investigation Team (SIT) on Black Money was that quoting of PAN should be made mandatory for all sales and purchases of goods and services where the payment exceeds Rs.1 lakh. Accepting this recommendation, the Finance Minister made an announcement to this effect in his Budget Speech. The Government has since received numerous representations from various quarters regarding the burden of compliance this proposal would entail. Considering the representations, it has been decided that quoting of PAN will be required for transactions of an amount exceeding Rs.2 lakh regardless of the mode of payment.

The notification to make PAN mandatory for all bank and insurance customers will come before December 31 this year,” said a finance ministry official, requesting anonymity. India has about 500 million bank accounts and roughly 54 million PANs have been issued.

PAN For The Banking And Monetary Transaction  :

Where PAN is mandatory
  • Sale or purchase of immovable property valued at Rs 5 lakh or more
  • Sale and puchase of vehicles excluding two wheelers
  • Fixed deposits, post office savings of Rs 50,000
  • Bank drafts of Rs 50,000
  • All security market participants
  • Income tax returns
  • Challans for payment of direct taxes
  • All correspondence with the income tax department
Where PAN is mandatory, but not strictly implemented

  • Application for opening a bank account
  • Installation of a telephone connection (including a cellular telephone)
  • Acquisition of credit cards
  • Payment to hotels & restaurants against bills exceeding Rs 25,000

Mentioning PAN For The Banking And Monetary Transaction 

PAN For The Banking And Monetary Transaction  : Mandating PAN in the banking transactions is a very impressive step by the Govt of India. This will help to monitor the flow of transactions made by each person. In last 3 months there are number of notifications which was passed by the Govt to keep track to all the transactions to bring transparency in the system. Let’s have a look at those recent notifications.

A person who has:Very recently with reference to notification no 2/2017 dated 06-01-2017 :

  • an account (other than a time deposit referred to at S.No.12 of the Table and a Basic Saving Bank Deposit Account).
  • maintained with a banking company or
  • a cooperative bank
  • to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) and
  • has not quoted his permanent account number or
  • furnished Form No. 60  as the case may be,
  • at the time of opening of such account or subsequently,
  • he shall furnish his permanent account number or Form No. 60, as the case may be,
  • to the person specified in clause (c) of sub-rule (1) of rule 114C
  • on or before the 28th day of February, 2017.”

(Source….

http://www.incometaxindia.gov.in/communications/notification/notification_2_2017.pdf

Before that Government has mandated the Quoting of PAN for cash deposit with Bank and Post Offices if it

  • exceeds fifty thousand rupees during any one day; or 
  • aggregates to more than two lakh fifty thousand rupees ;

during the period 09th November, 2016 to 30th December, 2016.

Let’s have a re-look to all the scenarios where disclosing PAN is mandatory as per Income Tax dept.

As per 114B.  Every person shall quote his permanent account number in all documents pertaining to the transactions specified in the Table below, namely and nature of transaction :

PAN For The Banking And Monetary Transaction  :


Sl.
NATURE OF TRANSACTIONMANDATORY QUOTING OF PAN (114B) and Value of Transacti0n
Existing requirementNew requirement
1.Immovable propertySale/ purchase valued at Rs.5  lakh or morei.       Sale/ purchase exceeding Rs.10 lakh;

ii.     Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN.

2Motor vehicle (other than two wheeler)All sales/purchasesNo change
3.Time depositTime deposit exceeding Rs.50,000/- with a banking companyi.      Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN;

ii.    Deposits aggregating to more than Rs.5 lakh   during the year will also need PAN

4.Deposit with Post Office Savings BankExceeding Rs.50,000/-Discontinued
5.Sale or purchase of securitiesContract for sale/purchase of a value exceeding Rs.1 lakhNo change
6.Opening an account (other than time deposit) with a banking company.All new accounts.i. Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts);

ii. Co-operative banks also to comply

7.Installation of telephone/ cellphone connectionsAll instancesDiscontinued
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 chequesAmount aggregating to Rs.50,000/- or more during any one dayExceeding Rs.50,000/- on any one day.
10.Cash deposit with banking companyCash aggregating to Rs.50,000/- or more during any one dayCash deposit exceeding Rs.50,000/- in a day.
11.Foreign travelCash 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 or purchase of foreign currency of an amount exceeding Rs.50,000/- at any one time (including fare, payment to travel agent)
12.Credit cardApplication to banking company/ any other company/institution for credit cardNo change.

Co-operative banks also to comply.

13.Mutual fund unitsPayment of Rs.50,000/- or more for purchasePayment exceeding Rs.50,000/- for purchase.
14.Shares of companyPayment of Rs.50,000/-  or more to a company for acquiring its sharesi.      Opening a demat account;

ii.    Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction.

15.Debentures/ bondsPayment of Rs.50,000/- or more to a company/ institution for acquiring its debentures/ bondsPayment exceeding Rs.50,000/-.
16.RBI bondsPayment of Rs.50,000/-or more to RBI for acquiring its bondsPayment exceeding Rs.50,000/-.
17.Life insurance premiumPayment of Rs.50,000/- or more in a year as premium  to an insurerPayment exceeding Rs.50,000/- in a year.
18.Purchase of jewellery/bullionPayment of Rs.5 lakh or more at any one time or against a billDeleted and merged with next item in this table
19.Purchases or sales of goods or servicesNo requirementPurchase/ sale of any goods or services exceeding Rs.2 lakh per transaction.
20.Cash cards/ prepaid instruments issued under Payment & Settlement ActNo requirementCash payment aggregating to more than Rs.50,000 in a year.

Provided that where a person, entering into any transaction referred to in this rule, is a minor and who does not have any income chargeable to income-tax, he shall quote the permanent account number of his father or mother or guardian, as the case may be, in the document pertaining to the said transaction:

Provided further that any person who does not have a permanent account number and who enters into any transaction specified in this rule, he shall make a declaration in Form No.60 giving therein the particulars of such transaction:

Provided also that the provisions of this rule shall not apply to the following class or classes of persons, namely : 

1the Central Government, the State Governments and the Consular Offices
2the 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:

37 [Provided also that a person who has an account (other than a time deposit referred to at S.No.12 of the Table and a Basic Saving Bank Deposit Account) maintained with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) and has not quoted his permanent account number or furnished Form No. 60, as the case may be, at the time of opening of such account or subsequently, he shall furnish his permanent account number or Form No.60, as the case may be, to the person specified in clause (c) of sub-rule (1) of rule 114C on or before the 28th day of February, 2017.

Explanation.- For the purposes of this rule,

1payment in connection with travel” includes payment towards fare, or to a travel agent or a tour operator, or to an authorised person as defined in clause (c) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999)
2“travel agent or tour operator” includes a person who makes arrangements for air, surface or maritime travel or provides services relating to accommodation, tours, entertainment, passport, visa, foreign exchange, travel related insurance or other travel related services either severally or in package;
3“time deposit” means any deposit which is repayable on the expiry of a fixed period.

http://www.incometaxindia.gov.in/pages/rules/income-tax-rules-1962.aspx?key=114b)

Mentioning PAN For The Banking And Monetary Transaction 

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