PAN is an essential financial document that is necessary for a wide range of financial transactions. Moreover, it is required for filing income tax returns, TCS or TDS credits, tax payments, and more.
As per updates from the government dated January 1 2016, you will need to quote your PAN for transactions that are more than Rs. 2 lakh. The following sections will provide a list of various transactions that will require you to provide your PAN details.
The primary objective of making PAN compulsory is to track different transactions that come with a taxable component. This enables the government to prevent tax evasion and subsequent revenue loss.
Here are the following transactions where you will have to provide the PAN as per updates of January 1 2016:
If you have a fixed deposit with any bank that exceeds Rs. 50,000 or aggregates to Rs. 5 lakh for a financial year, you will need to provide your PAN. This is applicable for deposits you make in banks, NBFCs, cooperative banks, and post offices.
Any sale or purchase of an immovable property that is worth more than Rs. 10 lakh will require a PAN. The previous transaction limit for this was Rs. 5 lakh.
You will need to provide PAN mandatorily while you purchase a four-wheeler. If you are selling your four-wheeler, you will also need to furnish your PAN. However, PAN is not compulsory during the sale or purchase of a two-wheeler.
You have to furnish your PAN if you want to open an account with any private, nationalised or cooperative bank. PAN will act as identification proof. However, PAN is not necessary when you are applying to open an account under Pradhan Mantri Jan Dhan Yojana.
If you are making a transaction worth more than Rs. 50,000 through any prepaid payment instrument such as social benefit cards, gift cards or remittances cards, you should furnish PAN details.
Your premiums for life insurance policies will depend on your policy coverage and various other factors. If the total payment towards your life insurance policy in a year exceeds Rs. 50,000, it is necessary to provide your PAN details.
PAN is mandatory for any hotel or restaurant bill payment that exceeds Rs. 50,000 and is paid in cash upfront.
When you make any cash payment for foreign travel expenses that exceed Rs. 50,000, you have to provide your PAN details. PAN is also required if you make a purchase of foreign currencies that is worth Rs. 50,000 or more.
The government has also made PAN compulsory for purchasing gold bullion or jewellery. You have to furnish PAN if you are buying gold worth Rs. 2 lakh or more through cash or card payment.
For making a cash deposit of more than Rs. 50,000 in a single day, you have to mention your PAN details.
If you are looking to purchase or sell shares of a company that is not listed on any of the stock exchanges, you will need to provide a PAN. However, the transaction should be worth Rs. 1 lakh or more. PAN is also essential for opening a Demat account.
If you make payments exceeding Rs. 50,000 to buy units of mutual funds, you need to provide PAN details. Similarly, you have to furnish PAN details while purchasing bonds or debentures worth more than Rs. 50,000.
If you are making any of these transactions or availing of any of these services, make sure to provide your PAN details. PAN is also required for any purchase of services or goods other than those mentioned above in case the transaction is more than Rs. 2 lakh.
Ans: The government introduced changes in rules regarding PAN for transactions on January 1 2016, with the following objectives:
The government wants to reduce illegal transactions, thereby slowing the movement of black money.
With reinforced rules regarding PAN card transactions, the government intends to expand its taxpayer base.
It wishes to monitor all high-value transactions to prevent tax evasion.
Ans: If you have misplaced your PAN, or it is not available at the moment, you can use your Aadhaar card while carrying out different transactions. You can also use Aadhaar in place of PAN for filing income tax returns. However, make sure that your PAN is linked with the Aadhaar card.
Ans: Yes, you can carry out any of the financial transactions even if you are a minor. You will have to quote the PAN of one of your parents or your guardian. However, he or she should not have a taxable income.
Ans: According to Rule 114B of the IT Act, quoting PAN for transactions is essential for all individuals. There are a few exceptions, such as the Central Government, State Governments and consular offices.
Ans: As per government updates provided on January 1 2016, you are no longer required to provide PAN while taking a telephone connection. The PAN requirement for telephone connection has been discontinued w.e.f the said date.
This article is solely for educational purposes. Navi doesn't take any responsibility for the information or claims made in the blog.
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