Recent Amendments To Income-Tax Rules

Quoting of PAN

· Rule
114B of the Income-tax Rules requires quoting of PAN number for
various transactions like purchase of property, purchase of vehicle,
opening bank account etc.

·
With effect from
1st
January 2016
following transactions will require quoting of PAN number:

• Sale of goods exceeding Rs. 2 Lacs
  in value;
• Sale of services exceeding Rs. 2
  Lacs in value;
• Sale of shares of an unlisted
  company exceeding Rs. 1 Lac in value

·  The
Rule requires quoting PAN number on documents pertaining to the said
transactions. Accordingly, bills/invoices for sale of goods and
services will have to mention PAN of the parties involved. While, PAN
will have to be quoted on letters or agreements executed for sale of
shares of unlisted companies.

· In
case if the party does not have a PAN, then the goods seller or
service provider will have to obtain from the party a declaration in
Form 60. And particulars of the said declaration will have to be
filed with the IT Department in Form 61.  

· In
case of sale of goods or services, quoting of  PAN is not
mandatory if the counter party is NRI.   

· The
Income-tax Act provides a penalty of Rs. 10,000 for every default in
compliance to Rule 114B. 
 

Information to IT Department

· Rule
114E requires a person to file information of certain transactions
with the IT Department in Form 61A (like purchase of property, cash
deposits in bank, purchase of shares & mutual funds etc.).  

· With
effect from 1st
April 2016 following
transactions will also have to be reported to the IT Department:

• Receipt of share application
  monies by a company exceeding Rs. 10 Lacs in a financial year
• Buy back of shares by a company
  exceeding Rs. 10 Lacs in a financial year
• Receipt of cash payment exceeding
  Rs. 2 Lacs towards sale of goods or services (applicable to those
  covered by tax audit)

· The
information of the said transactions as required by Form 61A is to be
filed with the IT Department on a yearly basis (within 2 months of
the end of the financial year).  

· The
Income-tax Act provides a penalty of Rs. 100 per day in case of delay
in filing of Form 61A.  

 
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