Citing PAN is mandatory for these financial transactions; find out what the income tax department says

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The Permanent Account Number (PAN) is a unique ten-digit alphanumeric number issued by the Income Tax Service. It allows the ministry to link all transactions of the appraisee with the ministry. These transactions include tax payments, TDS / TCS credits, tax returns, specified transactions, correspondence, etc.

It facilitates easy retrieval of appraised information and matching of various appraised investments, loans and other business activities.

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What are the specified financial transactions in which the citation of the PAN is mandatory?

The Income Tax Department has stated that according to Rule 114B, here are the transactions in which the citation of the PAN is mandatory by anyone except the central government, state governments, and states. consular offices:

1. Sale or purchase of a motor vehicle or a vehicle other than a two-wheeled vehicle.

2. Open an account [other than a time-deposit referred at point No. 12 and a Basic Savings Bank Deposit Account] with a banking company or cooperative bank.

3. Apply for the issuance of a credit or debit card.

4. Opening of a demat account with a depositary, member, securities depositary or any other person with SEBI.

5. Cash payment in excess of Rs. 50,000 to hotel or restaurant against invoice at any time.

6. Cash payment in excess of Rs. 50,000 as part of a trip to a foreign country or payment for the purchase of foreign currency at a particular time.

7. Payment of an amount greater than Rs. 50,000 to a mutual fund for the purchase of its shares.

8. Payment of an amount greater than Rs. 50,000 to a company or institution for the acquisition of bonds or bonds issued by it.

9. Payment of an amount exceeding Rs. 50,000 to the Reserve Bank of India for the acquisition of bonds issued by it.

10. Deposit with a banking company or cooperative bank: – Cash exceeding Rs. 50,000 during a day; or Cash deposit totaling over Rs. 2 50,000 during the period November 09, 2016 to December 30, 2016.

11. Cash payment for an amount greater than Rs. 50,000 in the course of a day for the purchase of bank drafts or payment orders or bank checks from a banking company or cooperative bank.

12. A term deposit in an amount greater than Rs. 50,000 or totaling more than Rs. 5 lakh during a financial year with – a banking company or a cooperative bank; a post office; a Nidhi referred to in article 406 of the Companies Act 2013 or a non-bank financial company.

13. Payment in cash or by means of bank draft or payment order or bank check totaling more than Rs. 50,000 during a financial year. for one or more prepaid payment instruments, as defined in the policy guidelines for the issuance and operation of prepaid payment instruments issued by the Reserve Bank of India under section 18 of the 2007 Act on payment and settlement systems to a banking company or cooperative bank or any other company or institution.

14. Payment of a total amount of more than Rs. 50,000 during a financial year as life insurance premium to an insurer.

15. A contract for the sale or purchase of securities (other than shares) for an amount greater than Rs. 1 lakh per transaction.

16. Sale or purchase, by any person, of shares of a company not listed on a recognized stock exchange for an amount greater than Rs. 1 lakh per transaction.

17. Sale or purchase of any immovable property for an amount greater than Rs. 10 lakh or assessed by the stamp assessment authority referred to in article 50C of the law at an amount greater than ten rupees lakh.

18. Sale or purchase of goods or services of any nature other than those specified above for an amount exceeding Rs. 2 lakh per transaction.
People may note that a minor can quote the PAN of their father or mother or guardian provided they have no income taxable to income tax. Anyone who does not have a PAN and who concludes any of the above transactions can make a declaration in Form # 60.

In addition, the listing of the PAN is not required by a non-resident in a transaction referred to in point 3 or 5 or 6 or 9 or 11 or 13 or 18.

How does the Income Tax Service ensure that PAN is quoted on transactions where PAN listing is mandatory?

According to the department, it is the legal responsibility of a person receiving documents relating to economic or financial transactions notified by the Central Commission for Direct Taxes (CBDT) to ensure that PAN has been duly cited in the documents in which PAN citation is required.

Thus, the recipient of these documents will ensure that PAN is cited in the respective document. For example, PAN is required to open a bank account and therefore the Bank will ensure that the applicant has indicated their PAN when applying for a bank account.


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