We receive a lot of queries from taxpayers about Permanent Account Number (PAN). The common questions are – Which transactions require PAN? Where should PAN number be quoted?
The Income Tax Department is getting stricter about tracking high-value transactions. It has laid out a list of transactions where it is mandatory to to quote PAN. [Under Rule 114B, a person involved in any of these transactions will have to quote their PAN in all documents pertaining to these transactions.]
Here is a list of the transactions and the value for which PAN is required.
|Type of transaction||Exceptions||Transaction value for PAN|
|Sale or purchase of a vehicle that requires registration by a registering authority||Two-wheeled vehicles||All transactions|
|Opening an account with a banking company or a co-operative bank||Time deposit account and basic savings bank account||All transactions|
|Applying for a debit card or credit card with a banking company or co-operative bank or any company or institution||–||All transactions|
|Opening a demat account with a depository, participant, custodian of securities or any other person registered by SEBI||–||All transactions|
|One-time payment to a hotel or restaurant against a single or multiple bills||–||Amount exceeding Rs 50,000|
|One-time payment in connection with travel to a foreign country or purchase of foreign currency||–||Amount exceeding Rs 50,000|
|Payment to a mutual fund for purchase of units||–||Amount exceeding Rs 50,000|
|Payment to a company or an institution for acquiring debentures or bonds issued by it||–||Amount exceeding Rs 50,000|
|Payment to RBI for acquiring bonds issued by it||–||Amount exceeding Rs 50,000|
|Cash deposit(s) with a banking company or co-operative bank in one day||–||Amount exceeding Rs 50,000|
|Cash payments for purchase of bank drafts, pay orders or banker’s cheques from a banking company or co-operative bank in one day||–||Amount exceeding Rs 50,000|
|A time deposit with a banking company or co-operative bank, post office, Nidhi, non-banking financial company||–||Amount exceeding Rs 50,000 or aggregating to more than Rs 5 lakh in a financial year|
|Payment by cash or pay order or bank draft or banker’s cheque for one or more pre-paid payment instruments issued by RBI||–||Amount exceeding Rs 50,000 in a financial year|
|Life insurance payment to an insurer||–||Amount exceeding Rs 50,000 in a financial year|
|A contract for sale or purchase of securities other than shares||–||Amount exceeding Rs 1 lakh per transaction|
|Sale of purchase of shares of a company not listed in a recognised stock exchange||–||Amount exceeding Rs 1 lakh per transaction|
|Sale or purchase of an immovable property||–||Amount exceeding Rs 10 lakh|
|Sale or purchase of goods or services of any nature||–||Amount exceeding Rs 2 lakh per transaction|
If any of the above transactions are carried out in the name of a minor, the PAN to be quoted would be of his or her father, mother or guardian.
In case you don’t have a PAN and you enter in any of these transactions, you will be required to make a declaration in Form No 60 wherein you shall provide details of the transaction.
A common exception for these transactions is that the rules do not apply to central government employees, state government employees, consular office employees and NRIs.