NEW DELHI
Furnishing PAN will be mandatory from Friday for cash transactions such as hotel or foreign travel bills exceeding Rs 50,000 - a move aimed at curbing the black money menace.
Besides, PAN will be a must for all transactions, including purchase of jewellery, above Rs 2 lakhs in cash or through card with effect from January 1, 2016, the finance ministry said in a notification.
PAN will also be mandatory on purchase of immovable property of over Rs 10 lakh. This will be a relief to small home buyers as previously the government had proposed to make PAN mandatory for property worth Rs 5 lakh. Quoting of Permanent Account Number (PAN) will also be mandatory for term deposits exceeding Rs 50,000 at one go or Rs 5 lakh in a year with banks, Post Offices and NBFCs.
The notification said PAN would be mandatory for payments of more than Rs 50,000 for cash cards or prepaid instruments as well as for acquiring shares of unlisted companies for Rs 1 lakh and above.
It has also been made mandatory for opening all bank accounts except Pradhan Mantri Jan Dhan Yojana accounts.
Finance minister Arun Jaitley had earlier this month announced in Parliament that PAN would be made mandatory for all cash and card transactions beyond Rs 2 lakh.
The limit is double of Rs 1 lakh that he had proposed in 2015-16 Budget, but is lower than the existing threshold of Rs 5 lakh.
Making cash deposit of more than Rs 50,000 or purchase of bank draft/pay orders/bankers cheque of equal denomination on a single day, payment of life insurance premium of Rs 50,000 in a year would also require quoting of PAN.
In keeping with the government's thrust on financial inclusion, opening of a no-frills bank account such as a Jan Dhan account will not require PAN.
Other than that, the requirement of PAN applies to opening of all bank accounts including in co-operative banks.
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From January 1, false information by non-PAN holders can land them in jail
NEW DELHI
A false declaration by an individual not possessing PAN card for certain value of transactions can land him upto a seven-year jail term and a hefty fine as part of Income Tax regulations that will come into force from January 2016.
As part of the directives issued by the government for implementation of the Permanent Account Number (PAN) regime from January 1, any person not having a PAN but undertaking a transaction which requires a mandatory quoting of it, will have to fill up 'Form No 60'.
The one-page form seeks personal details of the person undertaking the transaction along with a valid proof of identity and address, like Aadhaar and Elector's Photo Identity Card (EPIC) among others.
"There are people who may not have a PAN and still make a large transaction for which quoting of PAN is now essential. In such cases, such people have to fill Form 60 and making a false declaration of information in this will make them liable for punishment which could be a maximum of seven years of Rigorous Imprisonment (RI) with fine or a minimum of three months RI with fine under IT laws," a senior tax department official said.
The department is empowered to file a prosecution case against such people under section 277 of the IT Act (false statement in verification), the official said.
The said Act stipulates that in a case where tax sought to be evaded exceeds Rs 25 lakh (by way of false declaration in Form 60), the punishment is RI between 6 months-7 years with fine and in cases below this monetary limit, the punishment will be RI between 3 months-2 years with fine.
In order to achieve a two-pronged target of curbing the circulation of black money and widening tax base, the government has recently notified changes in the monetary limits that will require mandatory quoting of PAN.
PAN has been made compulsory from Friday for transactions like cash payment of hotel or foreign travel bill exceeding Rs 50,000, purchase of jewellery above Rs two lakhs in cash or card, purchase of immovable property of over Rs 10 lakh, term deposits exceeding Rs 50,000 or Rs 5 lakh in a year with banks, Post Offices and Non Banking Financial Companies among others.
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Under the 'Form No. 60', an individual has to provide his personal details like name, address, date of birth, mobile number and mode of transaction like cash, cheque, card, draft or banker's cheque, online transfer or any other.
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The form has an exclusive column to provide the Aadhaar number of the declarant and also includes space for mentioning the acknowledgement number which could have been received by them while applying for this 10-digit alphanumeric number.
