Trending
Home » CA » PAN Card Changes w.e.f. 1st January, 2016

PAN Card Changes w.e.f. 1st January, 2016

PAN Card Changes w.e.f. 1st January, 2016. Aiming to increase the cashless transaction and curbing the circulation of black money, Modi Government has taken various steps towards usage of PAN Cards including quoting PAN card number where the transaction exceeds a specified limit. A special investigation team (STT) created to reduces the circulation of black money suggested that quotation of PAN should be made necessary for any transaction exceeding Rs.1 lakh. The same suggestion was affirmed by the Finance Minister in the Budget Speech but considering the implications, the limit has been raised to Rs.2 lakh regardless the mode of payment. Further, monetary limits for various other transactions were also increased to reduce the burden of compliances such as the limit of Rs.5 lakh has been hiked to Rs.10 lakh in case of sale or purchase of any immovable property, limit of onetime payment of hotel or restaurant bills is raised to Rs.50,000 from Rs.25,000.

PAN Card Changes w.e.f. 1st January, 2016

Before going ahead let me first tell you what your PAN Card Digits Meaning.

PAN is 10 characters consist of digits as well as alphabets. Take a look at the image below for clear understanding.

Structure-Of-PAN-Card

First 3 alphabets (AAA) and last 4 digits (1234) is simply a running series which prevents allotment of more than one PAN to assessee with the same/similar names.

Fourth character (P) represents the type of assessee such as P for individual person, B indicates the name of the Entity/ Trust/ Society/ Organisation in the case of Company/ HUF/ Firm/ AOP/ BOI/ Local Authority/ Artificial Juridical Person/ Govt, the character shall be “C”,”H”,”F”,”A”,”T”,”B”,”L”,”J”,”G”.

A unique PAN can be allotted under this system maximum of 17 crore taxpayers under each alphabet under each status (i.e. individual, HUF, Firm, Company, Trusts, Body of Individuals, Association of Persons etc.)

PAN Card Changes Effective from 1st January, 2016.

Since you have got the meaning of your PAN card numbers, here are PAN Card Changes which will be Effective from 1st January, 2016. Here I am elaborating the important changes only. You can refer for all the changes in the summarized table added below.

1 Immovable Property Transactions

Any transaction of purchase or sell of immovable property exceeding value Rs.10 lakh or above requires mandatorily quoting of PAN. Further, if the stamp value authority values property exceeding Rs.10 lakh, quoting PAN is must irrespective of the transaction value.

2 Purchase of Jewellery Bullion

Purchasing Jewllery or Bullion exceeding Rs.2 lakhs will now require quoting PAN. Earlier this limit was Rs.5 lakhs but to curb the use of black money, transaction limit has been reduced.

However, it is yet to be cleared that whether the limit of Rs.2 lakhs is applicable on onetime payment or a single day transaction or single bill transaction.

3 Term/Time/Fixed Deposits

PAN is must for opening Time/Term/Fixed Deposits with Co-operative Banks, Post-Office, Nidhi, NBFCs. If aggregate amount of deposits exceeds Rs.5 lakh during a fiscal year than also PAN is to be quoted.

But opening fixed deposit account with banks do not required PAN card, however, opening savings bank account will require PAN. Bank account includes account open with Co-operative banks also.

4 Hotel or Restaurant Bills

A small relief is given to the travellers in terms of widening the monetary limit of quoting PAN. Earlier onetime payment of Rs.25,000 for settling Hotel or Restaurant Bills required PAN but now the limit of Rs.25,o00 is replaced with Rs.50,000.

5 Cash Deposit/Bank Draft/Pay Order/Banker’s Cheque

Not much change is happened here. Earlier, if Cash Deposit/Bank Draft/Pay Order/Banker’s Cheque aggregating to Rs.50,000 in a single day, PAN was must to be quoted but now the word aggregating to is substituted by “exceeding to”. So now PAN is required only when Cash Deposit/Bank Draft/Pay Order/Banker’s Cheque exceeds Rs.50,000 in a single day.

6 Foreign Travel

In line with the relief in hotel or restaurant bills, cash payment in connection with foreign travel i.e. payment to travel agent, ticket booking or purchase of foreign currency of Rs.50,000 at any onetime requires PAN. Earlier this limit was Rs.25,000.

7 Cash Cards/Prepaid Cards

Quoting PAN is also made necessary for a yearly payment exceeding Rs.50,000 through Cash Cards or Prepaid Cards.

Apart from above, there are several other transactions where the monetary limit has been revised.

A summarized table for all the PAN Card Changes effective from 1st January, 2016 is depicted below:

Sl. NATURE OF TRANSACTION MANDATORY QUOTING OF PAN
Existing requirement New requirement
1. Immovable property Sale/ purchase valued at Rs.5  lakh or more i.       Sale/ purchase exceeding Rs.10 lakh;

ii.     Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need quoting PAN.

2 Motor vehicle (other than two wheeler) All sales/purchases No change
3. Time deposit Time deposit exceeding Rs.50,000/- with a banking company i.      Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN;

ii.    Deposits aggregating to more than Rs.5 lakh   during the year will also need PAN

4. Deposit with Post Office Savings Bank Exceeding Rs.50,000/- Discontinued
5. Sale or purchase of securities Contract for sale/purchase of a value exceeding Rs.1 lakh No change
6. Opening an account (other than time deposit) with a banking company. All new accounts. i. Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts);

ii. Co-operative banks also to comply

7. Installation of telephone/ cellphone connections All instances Discontinued
8. Hotel/restaurant bill(s) Exceeding Rs.25,000/- at any one time (by any mode of payment) Cash payment exceeding Rs.50,000/-.
9. Cash purchase of bank drafts/ pay orders/ banker’s cheques Amount aggregating to Rs.50,000/- or more during any one day Exceeding Rs.50,000/- on any one day.
10. Cash deposit with banking company Cash aggregating to Rs.50,000/- or more during any one day Cash deposit exceeding Rs.50,000/- in a day.
11. Foreign travel Cash payment in connection with foreign travel  of an amount exceeding Rs.25,000/- at any one time (including fare, payment to travel agent, purchase of forex) Cash payment in connection with foreign travel or purchase of foreign currency of an amount exceeding Rs.50,000/- at any one time (including fare, payment to travel agent)
12. Credit card Application to banking company/ any other company/institution for credit card No change.

Co-operative banks also to comply.

13. Mutual fund units Payment of Rs.50,000/- or more for purchase Payment exceeding Rs.50,000/- for purchase.
14. Shares of company Payment of Rs.50,000/-  or more to a company for acquiring its shares i.      Opening a demat account;

ii.    Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction.

15. Debentures/ bonds Payment of Rs.50,000/- or more to a company/ institution for acquiring its debentures/ bonds Payment exceeding Rs.50,000/-.
16. RBI bonds Payment of Rs.50,000/-or more to RBI for acquiring its bonds Payment exceeding Rs.50,000/-.
17. Life insurance premium Payment of Rs.50,000/- or more in a year as premium  to an insurer Payment exceeding Rs.50,000/- in a year.
18. Purchase of jewellery/bullion Payment of Rs.5 lakh or more at any one time or against a bill Deleted and merged with next item in this table
19. Purchases or sales of goods or services No requirement Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction.
20. Cash cards/ prepaid instruments issued under Payment & Settlement Act No requirement Cash payment aggregating to more than Rs.50,000 in a year.

Hope this article will help you to know details of PAN Card Changes w.e.f. 1st January, 2016. Share this article ” PAN Card Changes w.e.f. 1st January, 2016 ” to your friends.

Check Also

CA Final Suggested Answers Nov 2016

CA Final Guideline Answers May 2017 by Shrigurukripa

CA Final Suggested Answers From May 2017 to Nov 2008 by Shrigurukripa Institution. In the …

Leave a Reply

Your email address will not be published. Required fields are marked *