Amendment Rules of PAN Transactions

Among the most significant documents, an Indian legal instrument is a PAN card. The Income Tax Department of India issues the Permanent Account Number (PAN) to the citizens of India as per the Income Tax Rules. Acting as Identity Proof, this 10-digit alphanumeric number records an individual’s transactions under a single database.

With the help of the Permanent Account Number, the Indian Government is able to track down all the financial activities of individuals. As per Income Tax Rules, it is mandatory to quote the PAN number for specifically large-amount transactions.

For the immovable-property dealing, the government has set a monetary limit of Rs. 10,00,000 while the limit for hotel bills and restaurants is Rs. 50,000. There’s a price ceiling to quote the PAN number of the said individual beyond this expense.

In a case where a person is dealing through cash transactions of Rs. 20,000, the government has imposed the same rule. A failure or violation of these rules can directly result in a penalty along with imprisonment.

What are the Amendment Rules for PAN Transactions?

The Amendment Rules for PAN transactions are a set of rules introduced by the Government of India which helps the Income Tax Department in tracking financial transactions, forbidding tax evasion along with broadening the tax base.

Types of Amendment Rules for PAN Transactions

There is 4 types of amendment rule for Pan Transactions in The Income Tax Department of India has listed down the following rules for Pan Transactions:

• Rule 114B
• Rule 114C
• Rule 114D
• Rule 114E

Rules 114B to 114E Overview

Rule 114B

Rule 114B of IT Rules 1962 deals with transactions that require individuals to quote their PAN number in all documents for clause (c) of sub-section (5) of section 139A. According to this rule, every individual will have to quote his/her Permanent Account Number in all documents that deal with transactions. This includes purchase or sale of a motor vehicle or vehicle other than two-wheelers, opening an account other than a fixed deposit and basic Savings Bank Deposit Account with a co-operative bank or banking company etc.

Rule 114C

Provision Rules for 114C are mentioned as below:

1. For an Individual
   • General inspector or any registering officer that got appointed under Registration Act 1908.
   • Individuals selling immovable property or any motor vehicle.
   • A manager or any officer related to any kind of banking company or any other cooperative banking according to the case that has been referred to in serial number 2 or 3 or 10 or 11 or 12 under Rule 114B.
   • Postmaster
   • Sub-Broker
   • Banker for an issue
   • Share Transfer factor
   • Merchant Banker
   • Stockbroker
   • Trustee for trust deed
   • Register to the issue
   • Investment Advisor
   • Portfolio Manager
   • Underwriter
   • Other Intermediaries that have registered themselves under the sub-section (1) section-12 of Securities & Exchange Board of India Act’ 1992.
   • Any participant or depositary or custodian securities or any other person that has been registered under the subsection of (1A) for section 12 of Securities & Exchange Board of India Act 1992 that has been referred to in serial number 4 of the Rule 114B.
   • Any principal officer that has been referred to serial number 3 or 4 or 8 or 12 or 13 or 15 or 16 under Rule 114B.
   • Any principal officer related to any institution for serial number 2 or 3 or 8 or 10 or 11 or 12 under Rule 114B.
   • Any trustee or any other person that has been authorized through the trustee of a mutual fund that has been referred to in serial number 7 under rule 114B.
   • An RBI officer that has been constituted as per section 3 under the RBI Act 1934 or for any other agency that has been legalized by RBI.
   • Any manager or any officer that has been insured to serial number 14 under Rule 114B.
2. Rule 114C takes into consideration those transactions that have been specified under Rule 114B where the documents once verified should make sure that the PAN card number is properly mentioned along with the correct declaration made in Form 60 which have been prepared to mention all the particulars.
3. Individuals concerned with raising bills with reference to serial number 5 or 6 or 8 as per Rule 114B that are related to transactions that have been mentioned under the said S.No, to which a document has been issued that makes sure that the post-verification of the PAN card number which has been mentioned accurately and it is also important for you to remember that the same information should accurately also be mentioned in your other documents along with declaration in Form 60 that has been prepared with all the particulars.

Rule 114D

Rule 114D consists of all the timings and manners for which individuals have been referred to under Rule 114C needs to format a statement that consists of all the pointers as per Form 60.

1. All the individuals under clause (a) to clause (k) as per sub-rule (1) under Rule 114C along with sub-rule (2) under Rule 114C that requires their respective accounts to get audited or re-checked according to section 44AB for the same act.

• • For individuals that have received declaration Form 60 at the start of 1st January 2016 for a transaction that has been mentioned in the Rule 114B needs to also provide a statement in the next form which is form 61 that includes information like:
  • Declaration for Direction of the Income Tax includes Intelligence & Criminal investigation by the online method of electronic data further to all the servers that are related to the same purpose & procurement. You also require the acknowledgement number and Retain Form 60 for about six years designated to the end of the financial year to which the transaction took place.
  • Declaration for Joint Director of the Income Tax includes Intelligence & Criminal investigation by the online method of electronic data further to all the servers that are related to the same purpose & procurement. You also require the acknowledgement number and Retain Form 60 for about six years designated to the end of the financial year to which the transaction took place.
  • The statement mentioned in clause (i) under sub-rule (1) requires it to be proper before 31st October for the same year if in case the declaration was received to the department on or before 30th
  • It is also important to be proper prior to 30th April for the same financial year for the same year when the individual actually received the form in case the declaration was received on or before 31st
  • The statement that is mentioned under clause (i) under sub-rule (1) needs to get verified for particularly those individuals that are properly setting the statement is known as assessed under clause (7) for section 2 for the Act, for an individual that has been notified under section 140 for the same Act and for other cases the individuals are normally referred under Rule 114C.
  • Principal Director General for the Income Tax Department or the Director-General for the income tax department then suggests the appropriate procedure or steps along with standards, the data structures that help in making sure that the data has been well captured and then transmitted. Further, the data captured is evolved & implemented well at the end.

Rule 114E

All the statements regarding the financial transaction are required to be well prepared according to subsection (1) under section 285BA for the Act needs to be prepared and aligned to the financial year as per Form 61A. Further, it is required to be verified properly according to the guidelines and Income Tax Rules of 1962. All the transactions that have been done through the mode of cash to make the payment for pay orders or any drafts set for a bank or any cheque that crosses the limit of INR 10 lakhs or a higher amount in the same financial year.

Conditions

1. It is important for the reporting manager to provide a copy of Form 61A through different mediums which include computer media, DVD, or a compact disc. This copy should also include the verification form in the Form-V papers. The reporting manager could be any individual from Postmaster General to Inspector General.
2. The digital signature that is provided needs to be the same signature that has been provided by the Certifying Authority. These certificates are entitled to the Controller Department of the certifying authority.
3. To make sure that all your data is safe, the structure and procedure are required to be set by the Principal General Director of the Income Tax Department. This is done to easily capture, implement, transmit and finally evolve the data.
4. The Board of the Information Administer then allot an officer that can’t be at a low rank than a Joint Director. This officer is allocated for furnishing the daily administration process which includes your statements and returns.
5. All the reporting individuals or officers are supposed to report to the Principal General Director of the Income Tax Department. They are supposed to provide them with necessary information such as your name, contact number, designation, and lastly your address, this is done to get your own registration number.
6. It is important for all the officers, the directors and for the employees to closely observe the entire process and management. It is mandatory for all the officers of the different departments to also maintain their data as per the guidelines and rules assigned by the officials as per section 285BA and the rules of 114B to all the rules till 114D.
7. The designated director is an employee that has been hired through the reporting manager, this designated director is supposed to keep a check and ensure that all the employees are following the guidelines and rules that have been assigned to them.
8. The Managing Director on the other hand is the person that gets assigned by the Board Directors. This managing director is assigned in cases where a reporting person is a form of a company.
9. Managing Partner is assigned when an individual is in a partnership firm.
10. Proprietor is somebody who is into a proprietorship firm.
11. Managing Trust if the reporting person is into trust.
12. Other managers who control and take care of all the other affairs as a reporting entity in case the same reporting entity is a part of any association regarding an unincorporated firm.
13. Principal officer is a person who has been appointed by the reporting entity.
14. Regulatory individuals on the other hand are the individuals or any kind of government entity that has all the rights to authorize, provide license, regulate as well register and also supervise the entire affair in the department.
15. It is mandatory for the Designated Director to sign and verify all the financial transactions provided to them.
16. In scenarios where a person is not a resident of the country, the same statement needs to get verified, signed & get rectify by the person who on the other hand has all the power assigned to them by the designated director.
17. Rules 114B & 114E are the set of rules that are designated for specific transactions that require a mandate PAN card. These rules talk about all the guidelines that are important for an individual to know before getting into the transaction process. And because the demonetization is now getting even more difficult and because there are more financial rules that are now coming into the picture, it is assumed that all the individuals are now going to make full use of the money judiciously but without breaking any kind of laws.

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