Transactions in Income Tax where PAN quoting is mandatory

Rule 114B

According to rule 114B the transactions for which quoting PAN is mandatory are following:

• Cash payment of an amount exceeding Rs 50,000 to a hotel or restaurant against a bill at any one time.
• If individual is making an application for issue of a credit card or debit card.
• Sale or purchase of motor vehicle or vehicle other than two wheeled vehicles.
• Opening of a demat account.
• Opening of an account with a banking company or a co- operative bank other than time deposit and basic saving bank deposit account.
• Making any cash payment of amount exceeding Rs 50,000 in connection with travel to any foreign country or purchasing of any foreign currency at any point of time.
• Making any cash payment of amount exceeding Rs 50,000 to a Mutual Fund for purchase of its units.
• Making any payment of amount exceeding Rs 50,000 to the Reserve Bank of India for acquiring bonds issued by it.
• Making any payment of amount exceeding Rs 50,000 to a company or an institution for acquiring bonds and debentures issued by it.
• Making any cash deposit with banking company or a co-operative bank of amount exceeding Rs 50,000 during any one day or cash deposit of aggregating to more than Rs 2,50,000 during the period 09^th November, 2016 to 30^th December 2016.
• Making any cash payment of amount exceeding Rs 50,000 during any one day for purchase of bank drafts or pay orders or banker’s cheques from a banking company or a co-operative bank.
• Making a time deposit of amount exceeding Rs 50,000 or aggregating to more than Rs 5,00,000 during a financial year with a banking company/ co-operative bank/ post office/ Nidhi referred to in section 406 of the Companies Act.
• Making an payment of amount aggregating to more than Rs 50000 in a financial year as life insurance premium to an insurer.
• A contract for sale or purchase of securities other than shares of amount exceeding Rs 1 lakh per transaction.
• Remittance of money out of India.
• Transfer of funds from NRE to NRO account.

Transaction Where Rule 114B is not applicable

This rule is not applicable on following class of persons:

• The Central government, the State Governments and the Consular Offices.
• The non- residents referred to in clause (30) of section 2 of the Act.

Penalty for contravention of Rule 114B

If the above rule is contravened then the individual have to face some penalties. The penalties are:

• If a person does any transaction mentioned above without having PAN card then Assessing officer may impose penalty of Rs 10,000.
• If a person who is required to quote his PAN, quotes a false PAN will face a penalty of Rs 10,000.