Be aware – Taxman is watching

We have discussed about the reasons why one has to be careful while executing high value transactions. The service providers of certain high value transactions are obliged to share the information with Income tax department. So, through this article, let’s examine the list of high value transactions for which one has to mention Permanent Account Number (PAN).

For the following transactions quoting PAN is compulsory –

1. Sale or purchase of any immovable property valued 5 Lakh rupees or more
2. Sale or purchase of any motor vehicle (other than two wheeler) which requires registration under motor vehicle act 1988 [Note: whether it is Alto or Benz, quoting PAN is necessary)
3. Fixed deposit more than 50,000 rupees with a bank or deposit in post office saving bank account.
4. Sale or purchase of shares, debentures exceeding Rs. 1 lakh
5. Opening a current or saving account in bank.
6. Making an application for installation of a telephone connection including cellular connection, an application to the bank applying for debit or credit card.
7. Payment to hotel/restaurants exceeding Rs. 25,000 at a time
8. Payment in cash for a bank draft/banker cheque/pay order for a bank aggregating Rs. 50,000 or more during one day
9. Cash payment in connection with travel to any foreign country for an amount exceeding Rs. 25000 or more at any one time
10. Payment of an amount of Rs. 50000 or more to a mutual fund for purchase of its unit, to a company for acquiring shares, debentures, RBI bonds, payment of Insurance premium.
11. Payment to a dealer of an amount of Rs. 5 lakh or more at any one time or against a bill for an amount of Rs. 5 lakh or more in the case for purchase of bullion or jewellery

Who are exempt from quoting PAN?

1. Those who have agricultural income only, can submit a declaration in Form 61 in lieu of PAN
2. Non Resident Indian (NRI), can submit passport copy to the service provider in lieu of PAN
3. Others not having PAN can submit a declaration in Form 60 in lieu of PAN 

Now the big question is how this information will be shared with Income Tax department. Read tomorrow’s article – AIR information.

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