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20 PAN Card Changes you must be aware about

PAN Card Changes

Recently the government of India had made 20 PAN card changes. These PAN card changes are applicable while doing various monetary transactions in India. This change also includes a mandatory requirement of mentioning PAN card while doing financial transactions above Rs 2 Lakh. This change will be effective from 1st January, 2016. The basic objectives behind these changes are given below.

  1. Curb prevailing black money flow

Black money is money generated from black market on which income and other taxes have not been paid. Corruption and illegal transaction is main source of black money. It is estimated that $16.4 Trillion is deposited in swizz bank by illegal way in form of black money. By making these changes it is expected that black money flow will reduce.

  1. Widening Tax payer base

You must be surprised to notice that as on today only 14% of Indian population has a PAN card and only 2.89% (3.6 Cr people) file income tax return out of 117 Cr. By introducing this change government will be monitoring high value transactions. It will help government to enhance tax payer base.

Also Read – 10 New Financial Changes and its impact on your pocket

20 Pan Card Changes Effective from 1st January, 2016

Quote Permanent Account Number (PAN) – It is mandatory to quote PAN card number for all sales and purchases of goods and services where the payment exceeds 2 Lakh regardless of mode of payment. Persons who do not hold PAN are required to fill a form and furnish the proof establishing identity.

Immovable property – All sale and purchase exceeding 10 Lakh it is mandatory to quote PAN card. Earlier limit was 5 Lakh. Any property valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN.

Motor vehicle – You need to mention PAN card on any sale or purchase of four wheel (Motor car).

Fixed Deposit – Fixed deposit aggregating amount more than 5 Lakh during financial year also need PAN.

Opening an account – One need to furnish PAN card while opening an account. Co-operative banks should also comply with this rule.

Hotel Bill – You need to furnish PAN card if you are paying Hotel/restaurant bill exceeding Rs.50,000 in cash.

Cash purchase of bank drafts – You need to mention PAN card if you are doing cash purchase of bank drafts/ pay orders or banker’s cheques exceeding Rs 50,000 on any day.

Cash Deposit – If you are making cash deposit of Rs 50,000 or more in a bank on single day you need to mention PAN Card.

Foreign travel – Quoting PAN card is mandatory for any cash payment in connection with foreign travel exceeding Rs 50,000. This rule is applicable for foreign currency purchase also.

Also Read – Cash Deposit Machine Locator

Credit Card – It is mandatory to mention PAN card number while applying for credit card at any company or bank.

Mutual fund or Bond Purchase – If your mutual funds or bond purchase value is exceeding   Rs.50,000 you need to mention PAN card number.

Shares of company – PAN card is mandatory on opening of DEMAT account or on purchase of unlisted company stock exceeding 1 Lakh.

Life insurance premium – In any year if life insurance premium is exceeding Rs. 50,000 you need to mention PAN card.

Purchase of jewelry/bullion – Earlier this limit was 5 Lakh, however now onwards for purchase of any Jewelry or bullion worth 2 Lakh you need PAN card.

Cash Card – If you are making cash payment using cash card or any prepayment instrument and transaction value is more than Rs. 50,000 in a year you need to mention PAN card number.

A chart highlighting the key PAN Card changes is given below.

Sr NO.
Existing requirementNew requirement
1.Immovable propertySale/ purchase valued at Rs.5  lakh or more
  1. Sale/ purchase exceeding Rs.10 lakh;
  2. Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN.
2Motor vehicle (other than two wheeler)All sales/purchasesNo change
3.Time depositTime deposit exceeding Rs.50,000/- with a banking company
  1. Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN;
  2. Deposits aggregating to more than Rs.5 lakh   during the year will also need PAN
4.Deposit with Post Office Savings BankExceeding Rs.50,000/-Discontinued
5.Sale or purchase of securitiesContract for sale/purchase of a value exceeding Rs.1 lakhNo change
6.Opening an account (other than time deposit) with a banking company.All new accounts.
  1. Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts);
  2. Co-operative banks also to comply
7.Installation of telephone/ cellphone connectionsAll instancesDiscontinued
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 chequesAmount aggregating to Rs.50,000/- or more during any one dayExceeding Rs.50,000/- on any one day.
10.Cash deposit with banking companyCash aggregating to Rs.50,000/- or more during any one dayCash deposit exceeding Rs.50,000/- in a day.
11.Foreign travelCash 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 cardApplication to banking company/ any other company/institution for credit cardNo change.Co-operative banks also to comply.
13.Mutual fund unitsPayment of Rs.50,000/- or more for purchasePayment exceeding Rs.50,000/- for purchase.
14.Shares of companyPayment of Rs.50,000/-  or more to a company for acquiring its shares
  1. Opening a demat account;
  2. Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction.
15.Debentures/ bondsPayment of Rs.50,000/- or more to a company/ institution for acquiring its debentures/ bondsPayment exceeding Rs.50,000/-.
16.RBI bondsPayment of Rs.50,000/-or more to RBI for acquiring its bondsPayment exceeding Rs.50,000/-.
17.Life insurance premiumPayment of Rs.50,000/- or more in a year as premium  to an insurerPayment exceeding Rs.50,000/- in a year.
18.Purchase of jewellery/bullionPayment of Rs.5 lakh or more at any one time or against a billDeleted and merged with next item in this table
19.Purchases or sales of goods or servicesNo requirementPurchase/ sale of any goods or services exceeding Rs.2 lakh per transaction.
20.Cash cards/ prepaid instruments issued under Payment & Settlement ActNo requirementCash payment aggregating to more than Rs.50,000 in a year.

These are welcome changes by the government of India and it will surely help our country in reducing black money and widening tax payer base. It will also boost cash less transactions.

What is your take on above PAN Card changes made by the government?

Shitanshu Kapadia
Shitanshu Kapadia
Hi, I am Shitanshu founder of moneyexcel.com. I am engaged in blogging & Digital Marketing for 10 years. The purpose of this blog is to share my experience, knowledge and help people in managing money. Please note that the views expressed on this Blog are clarifications meant for reference and guidance of the readers to explore further on the topics. These should not be construed as investment , tax, financial advice or legal opinion. Please consult a qualified financial planner and do your own due diligence before making any investment decision.
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