Rule 114B Income Tax Amended – Quoting of PAN for Specified Transactions

Quoting of PAN for Specified Transactions: Amendment of Rule 114B of Income Tax

CBDT vide Notification 95/2015 dt 30 Dec., 2015 has amended Income Tax Rule 114B, w.e.f. 1st Jan. 2016, to enhance monetary limit of certain transactions for which quoting of PAN is mandatory.

In other words, Rule 114B has been amended basically to enhance the monetary limits of certain transactions which require quoting of PAN, to bring a balance between burden of compliance on legitimate transactions and the need to capture information relating to transactions of higher value.

To curb the circulation of black money and widening of tax base, there is a requirement of quoting of PAN in certain specified transactions of the amount beyond certain limits. Persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity.

Based on the recommendations of the SIT on Black Money that quoting of PAN should be made mandatory for all sales and purchases of goods and services where the payment exceeds Rs.1 lakh, the Finance Minister had made an announcement to this effect in his Budget 2015 speech. Further, based on numerous representations received by GoI from various quarters regarding the burden of compliance it has been decided that quoting of PAN will be required for transactions of an amount exceeding Rs.2 lakh regardless of the mode of payment.

Existing and Revised Limits of Quoting PAN for Specified Transactions w.e.f. 1st Jan., 2016

The monetary limits for quoting of PAN in specified transactions have now been raised as under:

i) For sale or purchase of immovable property : from Rs. 5 lakh to Rs. 10 lakh

ii) In the case of hotel or restaurant bills paid at any one time : from Rs. 25,000 to Rs.50,000

iii) For purchase or sale of shares of an unlisted company : from Rs. 50,000 to Rs. 1 lakh

In keeping with the Government’s thrust on financial inclusion, opening of a no-frills bank account such as a ‘Jan Dhan Account’ will not require PAN. Other than that, the requirement of PAN applies to opening of all bank accounts including in co-operative banks.

It may be noted that Rules 114B, 114C and 114D (as substituted vide CBDT Notification 95/2015 dt. 30th Dec., 2015) is effective from 1st January, 2016 and rule 114E (as substituted vide CBDT Notification 95/2015 dt. 30th Dec., 2015) is effective from 1st April, 2016.

CBDT Press Release dt. 31 Dec. 2015 regarding Amendment of Rule 114B Quoting of PAN

CBDT Press Release dt. 15 Dec. 2015 regarding Amendment of Rule 114B Quoting of PAN

CBDT Notification 95/2015 dt. 30 Dec. 2015 amending Income Tax Rules 113B, 114C, 114D & 114E  

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