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