New PAN Quoting Rules – How individual transaction are effected from Jan 2016

Every person shall quote his permanent account number in all documents pertaining to the transactions specified below. The new rule make it compulsory to quote pan at the time of opening a bank account and Demat Account, purchase or sale of goods and services of more than Rs 2 lacs. Summary of transaction are as follows




Existing requirement

New requirement


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 PAN.


Motor vehicle (other than two wheeler)

All sales/purchases

No change


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


Deposit with Post Office Savings Bank

Exceeding Rs.50,000/-



Sale or purchase of securities

Contract for sale/purchase of a value exceeding Rs.1 lakh

No change


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


Installation of telephone/ cellphone connections

All instances



Hotel/restaurant bill(s)

Exceeding Rs.25,000/- at any one time (by any mode of payment)

Cash payment exceeding Rs.50,000/-.


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.


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.


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)


Credit card

Application to banking company/ any other company/institution for credit card

No change.

Co-operative banks also to comply.


Mutual fund units

Payment of Rs.50,000/- or more for purchase

Payment exceeding Rs.50,000/- for purchase.


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.


Debentures/ bonds

Payment of Rs.50,000/- or more to a company/ institution for acquiring its debentures/ bonds

Payment exceeding Rs.50,000/-.


RBI bonds

Payment of Rs.50,000/-or more to RBI for acquiring its bonds

Payment exceeding Rs.50,000/-.


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.


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


Purchases or sales of goods or services

No requirement

Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction.


Cash cards/ prepaid instruments issued under Payment & Settlement Act

No requirement

Cash payment aggregating to more than Rs.50,000 in a year.

Rules regarding quoting of PAN for specified transactions amended

The Government is committed to curbing the circulation of black money and widening of tax base. To collect information of certain types of transactions from third parties in a non-intrusive manner, the Income-tax Rules require quoting of Permanent Account Number (PAN) where the transactions exceed a specified limit. Persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity.

One of the recommendations of the Special Investigation Team (SIT) on Black Money was that quoting of PAN should be made mandatory for all sales and purchases of goods and services where the payment exceeds Rs.1 lakh. Accepting this recommendation, the Finance Minister made an announcement to this effect in his Budget Speech. The Government has since received numerous representations from various quarters regarding the burden of compliance this proposal would entail. Considering the representations, it has been decided that quoting of PAN will be required for transactions of an amount exceeding Rs.2 lakh regardless of the mode of payment.

To bring a balance between burden of compliance on legitimate transactions and the need to capture information relating to transactions of higher value, the Government has also enhanced the monetary limits of certain transactions which require quoting of PAN. The monetary limits have now been raised to Rs. 10 lakh from Rs. 5 lakh for sale or purchase of immovable property, to Rs.50,000 from Rs. 25,000 in the case of hotel or restaurant bills paid at any one time, and to Rs. 1 lakh from Rs. 50,000 for purchase or sale of shares of an unlisted company. 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.

The changes to the Rules will take effect from 1st January, 2016.

The above changes in the rules are expected to be useful in widening the tax net by non-intrusive methods. They are also expected to help in curbing black money and move towards a cashless economy.

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