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18 Transactions in which Quoting PAN is Compulsory – Rule 114B

Section 139A(5)(c) of Income tax act states that PAN is required to be quoted on transactions prescribed by CBDT.

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
(ii) a Post Office
(iii) a Nidhi company
(iv) a non-banking financial company

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

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

  1. If a person who is required to collect PAN is unable to do so, Assessing officer may impose penalty of Rs. 10,000.
  2. 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

About Rohit Pithisaria

Rohit Pithisaria is a Practicing Chartered Accountant from Jaipur and been in practice for more than 7 years. He is actively writing from very beginning of his professional career and is author of various tax articles and blogs.

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