Section 139A(5)(c) of Income tax act states that PAN is required to be quoted on transactions prescribed by CBDT. In such case, the seller of goods/services has to collect PAN from the buyer.
Rule 114B of Income Tax Rules states the transactions in which quoting of PAN is compulsory.
A table showing requirement under Rule 114B of Income Tax Act is given below-
| Sl no. | Nature of Nature of Transactions | Value of Transaction |
| 1 | Motor vehicle (other than two wheeler) | All sales/purchases |
| 2 | Opening an account (other than time deposit) with a banking company. | All new accounts. |
| 3 | Application for credit card or debit card | All transactions |
| 4 | Opening Demat Account | All transactions |
| 5 | Payment to Hotel/restaurant | Payment in cash of an amount exceeding fifty thousand rupees. |
| 6 | Payment in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time. | Payment in cash of an amount exceeding fifty thousand rupees. |
| 7 | Payment to a Mutual Fund for purchase of its units. | Amount exceeding fifty thousand rupees |
| 8 | Payment to a company or an institution for acquiring debentures or bonds issued by it. | Amount exceeding fifty thousand rupees |
| 9 | Payment to the RBI for acquiring bonds issued by it | Amount exceeding fifty thousand rupees |
| 10 | Deposit with a banking company or a co-operative bank or post office | Deposits in cash exceeding fifty thousand rupees during any one day |
| 11 | Purchase of bank drafts or pay orders or banker’s cheques from a banking company or a co-operative bank | Payment in cash for an amount exceeding fifty thousand rupees during any one day |
| 12 | A time deposit (i) with a banking company or a co-operative bank | Amount exceeding fifty thousand rupees or aggregating to more than five lakh rupees during a financial year |
| 13 | Payment for one or more pre-paid payment instruments | Payment in cash or by way of a bank draft or pay order or banker’s cheque of an amount aggregating to more than fifty thousand rupees in a financial year |
| 14 | Payment as life insurance premium to an insurer | Amount aggregating to more than fifty thousand rupees in a financial year |
| 15 | A contract for sale or purchase of securities (other than shares) | Amount exceeding one lakh rupees per transaction |
| 16 | Sale or purchase, by any person, of shares of a company not listed in a recognised stock exchange. | Amount exceeding one lakh rupees per transaction |
| 17 | Sale or purchase of any immovable property | Amount exceeding ten lakh rupees or valued by stamp valuation authority referred to in section 50C of the Act at an amount exceeding ten lakh rupees |
| 18 | Sale or purchase, by any person, of goods or services of any nature other than those specified at Sl. Nos. 1 to 17 of this Table, if any | Amount exceeding two lakh rupees per transaction |
A minor entering into any of above transaction and also doesn’t have any income chargeable to tax can quote his father’s, mother’s or guardian’s Permanent Account Number (PAN).
A person who doesn’t have PAN have to file a declaration in Form 60 giving the transactions details.
The provisions of this rule does not applies to the following class or classes of persons
- the Central Government, the State Governments and the Consular Offices.
- 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.
Penalty for Contravention
Section 272B defines the penalty for contravention of above rules.
- If a person who is required to collect PAN is unable to do so, Assessing officer may impose penalty of Rs. 10,000.
- 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.
Also Read – Procedure for Surrender Extra PAN Online
