PAN (Permanent Account Number) quoting is a vital requirement in specific transactions under the Income Tax Act. It ensures transparency and accountability in financial dealings. Let's explore the key points and penalties associated with PAN quoting.
Section
139A(5)(c):
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PAN Quoting Requirement: The CBDT mandates the
quoting of PAN in transactions prescribed by the authority.
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Buyer-Seller Responsibility: Sellers of goods or
services are responsible for collecting the PAN from buyers.
Rule
114B - Transactions Requiring PAN Quoting:
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Motor Vehicle Transactions: All sales or purchases
of motor vehicles, except two-wheelers, require PAN quoting.
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Banking Transactions: Opening a new account with a
banking company, excluding time deposits, necessitates PAN quoting.
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Credit Card and Debit Card Applications: PAN
quoting is compulsory for all credit card or debit card transactions.
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Demat Account Opening: PAN quoting is necessary for
opening a Demat account.
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Cash Payments: PAN must be quoted for cash payments
exceeding fifty thousand rupees in hotels/restaurants, foreign travel expenses,
Mutual Fund investments, debenture/bond acquisitions, and more.
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Other Transactions: PAN quoting is required for
various transactions, including large cash deposits, purchase of bank
drafts/pay orders/banker's cheques, time deposits, payments for prepaid payment
instruments, life insurance premiums, sale or purchase of securities, sale or
purchase of shares of unlisted companies, sale or purchase of immovable
property, and other goods or services exceeding two lakh rupees per transaction.
Consequences
of Non-Compliance:
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Failure to Collect PAN: Penalties of Rs. 10,000 may
be imposed if the person required to collect PAN fails to do so.
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Quoting False PAN: Penalties of Rs. 10,000 may be
imposed if a person required to quote PAN provides false information.
Conclusion:
Quoting PAN in specified income tax transactions is crucial for maintaining
transparency and accountability. By adhering to these requirements, individuals
and businesses contribute to a robust tax system. Failure to comply with PAN
quoting provisions can lead to penalties. It is essential to understand and
fulfill these obligations to ensure a smooth and lawful financial environment.
