All taxpayers in India, whether they’re entities or individuals, locals or foreigners, are required to have their respective Permanent Account Number or PAN Card. While its primary purpose is in ensuring a more effective taxation system in the country, this document is also a very important piece of information needed in many financial and business-related transactions. The Permanent Account Number is needed to help facilitate the completion of such transactions so people can enjoy what they are availing of a lot sooner. Here are 15 financial transactions where the PAN Card is considered an absolute must.
- If you buy or sell a property that is deemed immovable and with an appraised market value of Rs 10 Lakh or more. The previous limit to this requirement was Rs 5 Lakh. In addition to the increase in taxable value, all immovable properties that have been duly evaluated by the Stamp Valuation Authority to have a value of Rs 10 Lakh or more will also require you to quote your Permanent Account Number.
- If you buy or sell a motorized vehicle, except those that have two wheels.
- If you deposit with a cooperative bank, the Post Office, Nidhi, or NBFC companies. However, take note that there is no more limit on the amount of time deposit that you can make that requires PAN quotation. In the past, time depositing Rs 50,000/- or more with a bank required quoting of one’s PAN. However, the new ruling requires that all time deposits that produce an aggregate yearly total of more than Rs 5 Lakhs will require quoting of one’s PAN. To keep it short, if your total time deposits in a 12-month period doesn’t add up to Rs 5 Lakhs, you’re not required to quote your PAN.
- If you open a new bank account except a Basic Savings Bank Deposit Account or a Time Deposit Account. The new ruling now exempts Basic Savings Bank Deposit accounts to entice even low-wage earners to save up for their future.
- If you incurred any cash expenses at a hotel or a restaurant in excess of Rs 50,000/-. This is actually good news since the previous rule was that the limit is Rs 25,000/-. This simply means you can spend more for you and your business partners without really having to worry about quoting your PAN all the time. Additionally, the ruling now only applies to cash transactions so you can use your credit card for paying your restaurant and hotel bills. Bear in mind that there may be separate ruling for the limits on credit card use.
- If you buy banker’s checks, bank drafts, and pay orders exceeding Rs 50,000/- on any one day. Prior to this however, the limit was an aggregated daily of Rs 50,000/- minimum.
- If you deposit more than Rs 50,000/- in cash with a bank in any one day. Prior to 2016, the limit was an aggregated amount of at least Rs 50,000/- during any day.
- If you buy or sell securities with an appraised value of Rs 1 Lakh or more.
- If you go on a foreign trip and pay cash for transport fares or fees to various travel agents amounting in excess of Rs 50,000/-. The same is true if you’re going to purchase foreign currencies regardless of your travel plans. In the past, the limit was Rs 25,000/-.
- If you apply for a credit card from a bank or any other credit card company. This also applies to cooperative banks.
- If you buy mutual fund units amounting to more than Rs 50,000/-.
- If you buy or sell the shares of an unlisted company with a value exceeding Rs 1 Lakh per transaction. There’s also a new ruling on the opening of a demat account requiring PAN.
- If you buy or sell any product or service exceeding Rs 2 Lakh per transaction.
- If you buy cash cards and other prepaid instruments issued under the Payment & Settlement Act of the government, as long as the cash payments total to more than Rs 50,000/- annually.
- If you pay life insurance premium exceeding Rs 50,000/- annually.
It is worth noting that the new 2016 rulings on financial transactions requiring the quotation or showing of the PAN Card have clearly eased many of the restrictions found in the old system. Today, more people can enjoy the full benefits of a fully-organized and centralized taxation system in India by increasing limits and easing some of the restrictions.