CBDT
vide Notification dated 30-12-2015 has amended Rules for PAN and AIR
Information. While the press release dated 15-12-2015, broadly discussed the
likely changes in PAN requirements, the notification contains lot many creases
required to ironed out as under:
General Requirements
1
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PAN to be
quoted in all the documents pertaining to specified transactions
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2
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Where
person entering into transaction is Minor and does not have any income
chargeable to tax in India, such person shall quote PAN of father or mother
or guardian.
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3
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A person
who does not have PAN and enters into transaction specified in R. 114B shall
make a declaration in F.60. Old F.60 not revamped since 01-12-2004 has been
replaced with new F.60. New F.60 requires information about Father’s Name,
date of birth and contact which was not required earlier. Information
regarding Particulars of transaction has been elaborated to include date,
amount , mode of transaction and names, number of jointly involved persons in
transaction. Aadhaar Number, if available and acknowledgement number of PAN
application (where PAN applied for) also required in New F.60. Earlier while
document supporting address was required but now both ID and Address Proof
along with document code and document identification number required. Also
estimated Agricultural Income and non agricultural income to be provided.
Earlier Form 61 which pertained to perons having agriculture income only has
been rescinded and replaced with statement in
Form 61 for providing information to the department.
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4
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Form 60 is required to be
retained for six years from end of financial year (not assessment year) in
which transaction is under taken. E.g. transaction for AY 2016-17 is
undertaken in FY 2015-16, then F 60 to be retained till 31-03-2022.
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5
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Form 61 statement required to
furnished electronically by 30th April and 31st October for
declarations received till 31st March and 30th
September. Since Form 61 has been introduced only wef 01-01-2016, the issue
whether it shall include transactions from 01-10-2015 to 31-12-15 shall
perturb the tax payer.
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6
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Requirement of quoting PAN
shall not apply to Central Government, State Government and the Consular
Offices. However this exemption is not available for Local authorities,
Improvement Trust, Development Boards
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7
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In case of non resident,
requirement of quoting PAN/Form 60 shall apply for following transactions
only:
i)
Sale
or Purchase of motor vehicle
ii)
Sale
or purchase of any immovable property
iii)
Purchase
of debentures/ bonds from issuing Compnay for amount > Rs. 50,000
iv)
Purchase of units from issuing Mutual fund
for amount > Rs. 50,000
v)
Cash deposit exceeding Rs. 50000 in any one
day with banking company or co-operative bank.
vi)
Time
Deposits With Banking Company or Co-operative Bank , Post Office,Nidhi, NBFC for amount exceeding Rs. 50000 or
aggregating to more than five lacs during financial year
vii)
Opening of account with banking company or
co-operative bank (other than time deposits and basic saving accounts).
viii)
Opening of Demat Account.
ix)
Contract for sale or purchase of securities
(other than shares) for amount exceeding Rs. One lakh per transaction
x)
Sale or purchase of unlisted shares of a
company for amount exceeding Rs. One lakh per transaction
xi)
Payment of LIP aggregating more than Rs.
50,000 during financial year.
In Old rules, there was blanket exemption
available to non resident from quoting PAN/providing declaration in F.60
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8
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Last date of filing return of
AIR Information has been shifted from 31 st August to 31st May of
succeeding financial year u/R 114E(5).
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New
requirements regarding quoting of PAN for specified transactions along with
requirement of furnishing AIR Information under relevant nature of transactions
is provided below:
Sale or
purchase of Motor Vehicle
1.
Only
Motor Vehicle covered by section 2(28) of Motor Vehicle Act 1988 and
requiring registration by registering authority are covered which means
that
a)
Vehicle
for use upon roads only shall require quoting of PAN. Air, Water vehicle are
not covered.
b)
Only
mechanically propelled vehicles are covered. Manually propelled vehicle shall
therefore stand excluded.
c)
Vehicles
running upon fixed rails are not covered
d)
Vehicles
of special type adapted for use in factory or any other enclosed premises are
not covered.
e)
Motor
Vehicle shall include includes a chassis to which a body has
not been attached and a trailer
f)
Vehicles
having lesser than four wheels and fitted with not more than 25CC engine are
not covered.
g)
All types of two wheeled vehicles like scooter,
motor cycle etc are specifically excluded even if covered by definition of
motor vehicle
2.
In pre amended rules, two wheeled vehicles, inclusive of any detachable side-car having an extra wheel,
attached were excluded. Amended rules though silent about detachable side car
might still include two wheeled vehicles with detachable side cars.
3.
In pre amended Rules, a
registering authority as well as buyer and seller were required to ensure
that document pertaining to sale or purchase contain PAN or that F.60 is obtained
from other party failing such compliance.
4.
However in amended Rules
only seller is required to ensure that PAN is quoted on document obtained by
him from the buyer and if PAN of the buyer is not available Form 60 shall be
obtained from the buyer.
5.
All eligible transactions
irrespective of monetary limit are covered.
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Sale or
Purchase of Immovable Property
1.
PAN
to quoted for transaction exceeding Rs. 10 lacs. Also PAN to be quoted for
transactions valued at more than ten lacs by stamp valuation authority, even
if actual transaction is for lesser amount. [Older limit was Rs. 5 lacs]
2.
However
the transactions for which valuation by stamp authority is not required like
leasehold rights, the amended rules may not applicable if actual transaction
amount is ten lacs or less. Section 50C is not applicable to such
transactions as per ITAT Mumbai in Atul G. Puranik and ITAT Pune in Kancast
(P) Ltd.
3.
In
case of gifts, wills, trusts, power of attorney transactions since no sale or
purchase is involved, R. 114B might not apply
4.
Immovable
Property is not defined in Income tax Act but as per General Clauses Act “Immovable property” shall include
land, benefits to arise out of land, and things attached to the earth, or
permanently fastened to anything attached to the earth.
5.
Agricultural Land shall also be included.
However whether transactions of bayana sale shall also be covered is a moot
point.
6.
In pre amended Rules, a
registering authority as well as buyer and seller were required to ensure
that document pertaining to sale or purchase contain PAN or that F.60 is
obtained from other party failing such compliance. However in amended rules,
obligation is caste upon registering authority and seller only.
7.
AIR Information of sale or purchase of immovable property for an amount of thirty lakh
rupees or more or valued by the stamp valuation authority referred to in
section 50C of the Act at thirty lakh rupees or more to be furnished by
registration authority. In earlier Rule there was no requirement to send AIR
Information where value exceeded Rs. 30 lacs on basis of valuation of stamp
duty authority and not otherwise.
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For General
Transactions of Sale or Purchase of Goods or Services of any nature PAN
to be quoted where amount exceeds Rs. Two lacs per transaction excluding
following transactions :
a)
Sale
or purchase of motor vehicle where PAN to be quoted irrespective of amount
b)
Sale
of purchase of immovable property where PAN to be quoted for amount exceeding
10 lacs.
c)
Sale
or Purchase of Securities (other than shares) where PAN to be quoted for
transactions exceeding Rs. One lac.
d)
Sale
of purchase of shares of unlisted Company where PAN to be quoted for
transactions exceeding Rs. One lac.
e)
Purchase
of foreign currency in cash where PAN to be quoted for payment exceeding Rs.
50000 at any one time.
f)
Purchase
of units of Mutual funds from issuing mutual fund where PAN to be quoted for
payment exceeding Rs. 50000.
g)
Purchase
of debentures or bonds from issuing company where PAN to be quoted for
payment exceeding Rs. 50000
h)
Purchase
of RBI Bonds from RBI where PAN to be quoted for payment exceeding Rs. 50000
i)
Payment
in cash for services to Hotel or restaurant against a bill exceeding Rs.
50,000 at any one time.
j)
Payment
in cash for services in connection with foreign travel exceeding Rs. 50000 at
any time.
1.
Limit
of two lacs shall apply whether
transaction is conducted in cash or cheque. However for payments to Hotel,
restaurants, payments for foreign travel, foreign exchange while limit for
cash transactions is Rs. 50,000 , limit for non cash transactions only shall
be two lacs.
2.
It
may also be pertinent to mention that at present u/s 206C(1D) TCS @ 1%
required to be collected by seller for cash transactions only exceeding 2
lacs for bullion and exceeding 5 lacs for jewellery. Earlier requirement of
quoting PAN where payment to dealer for amount equivalent and greater than 5
lacs(both cash and non cash) for purchase of bullions and jewellery is made
done away and rather reduced to Rs. 2 lacs.
3.
U/R
114C(2) , seller issuing bill to ensure after verification that PAN has been
correctly furnished and mentioned in the document or that F.60 has been duly
furnished with complete particulars where PAN is not available.
4.
However
all such sellers are not required to electronically furnish data about F. 60
to the department and it is only where audit is required u/s 44AB (including
audit for presumptive taxation) that data is required to be furnished
electronically in F. 61 besides retaining F.60 for six years from end of
financial year (not assessment year) in which transaction is under taken.
E.g. transaction for AY 2016-17 is undertaken in FY 2015-16, then F 60 to be
retained till 31-03-2022.
5.
Sale
or purchase by non residents under this category and sale or purchase by
Central Government , State Government and Consular Offices is outside the
purview of this Rule and therefore requirement of quoting PAN shall not
apply. However this exemption is not available for Local authorities,
Improvement Trust, Development Boards.
6.
Term
service not defined under income tax law. Renting of immovable property is a
declared service under service tax law for charging service tax but whether
the same concept shall apply in income tax law is again a moot point. Employee providing his services to employer
on the other hand is outside the purview of service tax law. Financial
services like interest are also outside the purview of service under service
tax law. Hence term service might need a little clarification.
7.
AIR
Information regarding receipt
of cash payment exceeding two lakh rupees for sale, by any
person, of goods or services of any nature to be furnished by any person who
is liable for audit under section 44AB of the Act. Earlier no such AIR
Information was required to be furnished.
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Payment in
cash to Hotel or restaurant against a bill or bills exceeding Rs. 50,000 at
any one time:
1.
If
payment not exceeding Rs. 50,000 in cash is made at more than one time
although cumulatively exceeding Rs. 50,000, requirement of quoting PAN may be
obviated.
2.
If
there are multiple bills and payment is made against all of them at one time
exceeding Rs. 50,000, the requirement of quoting PAN shall apply.
3.
For
payment through credit card, debit card, cheque, draft , RTGS quoting of PAN
shall be required only if amount per transaction exceeds Rs. 2 lacs. Raising
separate bills against separate services shall constitute separate
transactions.
8.
U/R
114C(2) , Hotel or restaurant issuing bill to ensure after verification that
PAN has been correctly furnished and mentioned in the document or that F.60
has been duly furnished with complete particulars where PAN is not available.
9.
However
all such Hotels or restuarants are not required to electronically furnish
data about F. 60 to the department and it is only where audit is required u/s
44AB (including audit for presumptive taxation) that data is required to be
furnished electronically in F. 61 besides retaining F.60 for six years from
end of financial year (not assessment year) in which transaction is under
taken. E.g. transaction for AY 2016-17 is undertaken in FY 2015-16, then F 60
to be retained till 31-03-2022.
10.
Old
Limit was Rs. 25000 which has been enhanced to Rs. 50,000.
11.
In
earlier Rules, limit of Rs. 25000 applied to non cash transactions also,
however the enhanced limit of Rs. 50,000 is applicable to cash transactions
only.
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Payment in
cash in connection with travel to any foreign country or purchase of foreign
currency exceeding Rs. 50,000 at any onetime :
1.
Payment
in connection with travel includes payment to a travel agent or a tour
operator (who makes arrangements for air, surface or maritime travel or
provides services relating to accommodation, tours, entertainment, passport,
visa, foreign exchange, travel related insurance or other
travel related services either severally or in package). Payment for foreign
currency also separately covered. Foreign currency however gets covered under
foreign exchange as per FEMA.
2.
Payment in connection with travel includes
payment to authorized person defined in FEMA (money changer not covered).
3.
Payment
in connection with travel includes payment towards fare.
4.
In
older Rules, travel to foreign country excluded travel to neighboring country
and specified places of pilgrimage. However this distinction has been done
away in new Rules and travel to neighboring countries requiring payment
exceeding Rs. 50,000 in cash shall now require quoting of PAN.
4.
If
payment not exceeding Rs. 50,000 in cash is made at more than one time
although cumulatively exceeding Rs. 50,000, requirement of quoting PAN may be
obviated.
5.
For
payment through credit card, debit card, cheque, draft , RTGS quoting of PAN
shall be required only if amount per transaction exceeds Rs. 2 lacs.
6.
U/R
114C(2) , person issuing any document for foreign travel fare or travel agent
or tour operator issuing bill to
ensure after verification that PAN has been correctly furnished and mentioned
in the document or that F.60 has been duly furnished with complete
particulars where PAN is not available.
7.
However
all such person issuing any document for foreign travel fare or travel agent
or tour operator are not required to electronically furnish data about F. 60
to the department and it is only where audit is required u/s 44AB (including
audit for presumptive taxation) that data is required to be furnished
electronically in F. 61 besides retaining F.60 for six years from end of
financial year (not assessment year) in which transaction is under taken.
E.g. transaction for AY 2016-17 is undertaken in FY 2015-16, then F 60 to be
retained till 31-03-2022.
8.
Old
Limit was Rs. 25000 which has been enhanced to Rs. 50,000.
9.
In
Earlier Rules, limit of Rs. 25000 applied to cash payment only, and enhanced limit of Rs. 50,000 is also applicable
to cash transactions only.
10.
AIR
Information regarding
Receipt from any person for sale of foreign currency including any credit of
such currency to foreign exchange card or expense in such currency through a
debit or credit card or through issue of travellers cheque or draft or any
other instrument of an amount aggregating to ten lakh rupees or more during a
financial year to be furnished by authorized person under FEMA.
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Transactions
in Financial Instruments requiring quoting of PAN:
In above
cases, buyer or seller is not required to ensure quoting of PAN/furnishing of
F.60 but depository, participant, custodian of securities in case of demat
accounts, principal officer of the company in case of transactions in
securities(other than shares) and unlisted shares, trustee of Mutual Fund ,
Officer of RBI to ensure correct and quoting of PAN/obtention of F.60
Non
residents also required to furnish PAN/Form 60 in all above cases except for purchase
of RBI Bonds because RBI Bonds are not available to non residents for
investment.
AIR
Information regarding
Receipt from any person of an amount aggregating to ten lakh rupees or more
in a financial year for acquiring shares (including share application money)
issued by the company to be furnished . Earlier limit was Rs. One lakh per
transaction and share application money was not included
AIR
Information regarding
Buy back of shares from any person (other than the shares bought in the open
market) for an amount or value aggregating to ten lakh rupees or more in a
financial year to be furnished by listed company buying back its shares.
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Banking
Transactions:
Earlier R.
114 B was applicable to banking Companies,Co-operative Banks were not
covered. However wef 01-01-2016, co-operative banks have been specifically
roped in for all specified banking transactions here in :
Manager or officer of banking
company or cooperative bank, post master, principal officer of company or
institution shall ensure quoting of correct PAN on documents received or
obtention of F.60
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Payment of LIP aggregating more
than Rs. 50,000 during financial year shall require quoting of PAN. Manager
or officer of Insurance Compnay shall ensure quoting of correct PAN on documents received or
obtention of F.60. There is no change in this regard.
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