Permanent Account Number (PAN)
The Government is all out to curb black money and you, my reader, will not be spared even if you are an average Joe. There are a barrage of instances where usage of Permanent Account Number (PAN) has become mandatory, above a certain threshold amount. All these changes are going to be in effect from 1st January, 2016.
It requires no telling that quoting of PAN in all financial transactions will effectively create a trail of transactions which the Income Tax Department can easily look into. This will also help the tax officials determine if you are paying enough tax as well.
The media reports pointed to the simple fact that quoting of PAN is essential for any form of transaction exceeding Rs.2 lakh, regardless of the mode of payment. Other than this, there are several other instances as well, where starting 2016, PAN has become mandatory. All the instances mentioned below come under Rule 114B of the Income-tax Act. Following is the brief list:
1) During purchase/ sale of immovable property exceeding Rs 10 lakh
2) While making a time deposit with any financial institution like Co-op banks, Post Office, Nidhi and NBFC
3) At the time of opening any form of bank account except opening of a no-frills bank account such as a Jan Dhan Account
4) For payment of hotel or restaurant bills exceeding Rs 50,000 at any one point through any mode of payment
5) PAN should be quoted for purchase of bank drafts/ pay orders/ banker’s cheques exceeding Rs 50,000 on a single day
6) Cash deposit exceeding Rs.50,000/- in a single day.
7) For purchase of foreign currency or cash payment related to foreign travel exceeding Rs.50,000/-
8) Payment in excess of Rs 50,000 for purchase of mutual fund units
9) For opening a demat account
10) Purchase or sale of shares of an unlisted company for an amount exceeding Rs1 lakh per transaction.
11) Payment exceeding Rs.50,000 for purchase of Debentures/ bonds
12) Payment exceeding Rs.50,000 for purchase of RBI bonds
13) Payment exceeding Rs.50,000/- in a year as life insurance premium
14) Cash payment aggregating to more than Rs.50,000 in a year towards cash cards/ prepaid instruments issued under Payment & Settlement
Other than this, the the Pension fund regulatory body PFRDA too has decided to use PAN instead of Aadhaar for validation of new customers registered online under the National Pension System scheme.
Given the increased prominence of PAN, individuals should be very alert as to where they are using their PAN numbers. It is a common culture in India to use PAN as an identity card in each and every place, at the slightest requirement. Therefore, there have been instances in the past, regarding theft of PAN numbers, especially those used while booking railway tickets.
PAN is your identity and I am sure you don’t want your identity to be misused.
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