Mentioning PAN for the banking and monetary transaction

Amitav , Last updated: 12 January 2017
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Mandating PAN in the banking transactions is a very impressive step by the Govt of India. This will help to monitor the flow of transactions made by each person. In last 3 months there are number of notifications which was passed by the Govt to keep track to all the transactions to bring transparency in the system. Let’s have a look at those recent notifications.

Very recently with reference to notification no 2/2017 dated 06-01-2017:

A person who has:

an account (other than a time deposit referred to at S.No.12 of the Table and a Basic Saving Bank Deposit Account)
maintained with a banking company or
a cooperative bank
to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) and
has not quoted his permanent account number or
furnished Form No. 60, as the case may be,
at the time of opening of such account or subsequently,
he shall furnish his permanent account number or Form No. 60, as the case may be,
to the person specified in clause (c) of sub-rule (1) of rule 114C
on or before the 28th day of February, 2017.”.

(Source- http://www.incometaxindia.gov.in/communications/notification/notification_2_2017.pdf)

Before that Government has mandated the Quoting of PAN for cash deposit with Bank and Post Offices if it

exceeds fifty thousand rupees during any one day; or
aggregates to more than two lakh fifty thousand rupees ;

during the period 09th November, 2016 to 30th December, 2016.

Let’s have a re-look to all the scenarios where disclosing PAN is mandatory as per Income Tax dept.

As per 114B. Every person shall quote his permanent account number in all documents pertaining to the transactions specified in the Table below, namely:-

Sl.No.

Nature of transaction

Value of transaction

(1)

(2)

(3)

Sale or purchase of a motor vehicle or vehicle, as defined in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988) which requires registration by a registering authority under Chapter IV of that Act, other than two wheeled vehicles.

All such transactions.

Opening an account [other than a time-deposit referred to at Sl. No.12 and a Basic Savings Bank Deposit Account] with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act).

All such transactions.

Making an application to any banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or to any other company or institution, for issue of a credit or debit card.

All such transactions.

Opening of a demat account with a depository, participant, custodian of securities or any other person registered under sub-section (1A) of section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992).

All such transactions.

Payment to a hotel or restaurant against a bill or bills at any one time.

Payment in cash of an amount exceeding fifty thousand rupees.

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.

Payment to a Mutual Fund for purchase of its units.

Amount exceeding fifty thousand rupees.

Payment to a company or an institution for acquiring debentures or bonds issued by it.

Amount exceeding fifty thousand rupees.

Payment to the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934 (2 of 1934) for acquiring bonds issued by it.

Amount exceeding fifty thousand rupees.

36[10.

Deposit with,-

(i)		banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act);
(ii)		Post Office.

Cash deposits,-

(i)		exceeding fifty thousand rupees during any one day; or
(ii)		aggregating to more than two lakh fifty thousand rupees during the period 09th November, 2016 to 30th December, 2016.]

11.

Purchase of bank drafts or pay orders or banker's cheques from a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act).

Payment in cash for an amount exceeding fifty thousand rupees during any one day.

12.

A time deposit with,-

(i) a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act);

(ii) a Post Office;

(iii) a Nidhi referred to in section 406 of the Companies Act, 2013 (18 of 2013); or

(iv) a non-banking financial company which holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934), to hold or accept deposit from public.

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, as defined in the policy guidelines for issuance and operation of pre-paid payment instruments issued by Reserve Bank of India under section 18 of the Payment and Settlement Systems Act, 2007 (51 of 2007), to a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) or to any other company or institution.

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 as defined in clause (9) of section 2 of the Insurance Act, 1938 (4 of 1938).

Amount aggregating to more than fifty thousand rupees in a financial year.

15.

A contract for sale or purchase of securities (other than shares) as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956).

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:

Provided that where a person, entering into any transaction referred to in this rule, is a minor and who does not have any income chargeable to income-tax, he shall quote the permanent account number of his father or mother or guardian, as the case may be, in the document pertaining to the said transaction:

Provided further that any person who does not have a permanent account number and who enters into any transaction specified in this rule, he shall make a declaration in Form No.60 giving therein the particulars of such transaction:

Provided also that the provisions of this rule shall not apply to the following class or classes of persons, namely:-

(i)		the Central Government, the State Governments and the Consular Offices;
(ii)		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:

37 [Provided also that a person who has an account (other than a time deposit referred to at S.No.12 of the Table and a Basic Saving Bank Deposit Account) maintained with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949), applies (including any bank or banking institution referred to in section 51 of that Act) and has not quoted his permanent account number or furnished Form No. 60, as the case may be, at the time of opening of such account or subsequently, he shall furnish his permanent account number or Form No.60, as the case may be, to the person specified in clause (c) of sub-rule (1) of rule 114C on or before the 28th day of February, 2017.]

Explanation.- For the purposes of this rule,-

(1)		"payment in connection with travel" includes payment towards fare, or to a travel agent or a tour operator, or to an authorised person as defined in clause (c) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999);
(2)		"travel agent or tour operator" includes a person who makes arrangements for air, surface or maritime travel or provides services relating to accommodation, tours, entertainment, passport, visa, foreign exchange, travel related insurance or other travel related services either severally or in package;
(3)		"time deposit" means any deposit which is repayable on the expiry of a fixed period.]