Quoting PAN numbers for some financial transactions has been mandatory for a couple of years in India now. For transactions involving smaller amounts of money, PAN Cards need not always be quoted. However, a high-value financial transaction needs a PAN attached to it.
If someone doesn't quote their PAN number for transactions of higher value amount, then these are considered High Value Non-PAN Transactions. IT Department eyes all such transactions with suspicion and sends notices to individuals concerned in these transactions.
Not all financial transactions are considered high-value financial Transactions by the IT Department. There are specific definitions for high-value financial transactions. If you partook in any of the following transactions and didn't quote your PAN number, then they will be considered as High Value Non-PAN Transactions.
All financial transactions of high value are automatically reported to the Income Tax Department of India. This reporting system by all financial institutes related to high value transactions is known as AIR or Annual Information Report.
Thus, when any high value Non-PAN Transaction takes place, it automatically comes under the radar of the IT Department. The department issues notice to any individual involved in such transactions. The notice directs the individuals to either to own up to these transactions, or respond to the notice.
Anyone receiving such a notice from the IT department should respond to it immediately using the government's tax e-filing website. If a person fails to respond within 15 days of receiving the notice, strict action will be taken against such person.
Follow the steps mentioned below to how to respond to IT notice for High Value Non PAN Transactions.
Step 1 - Sign it at the e-filing portal Register using the 'Register Yourself' link at the portal if you are not already registered.
Step 2 - Go to "Non-PAN Transaction" under "Compliance" section. Search the section using the Transaction Sequence Number (TSN) sent to you.
Step 3 - Confirm that the transaction is related. You can view the transaction details by clicking on "Submit to View Further Details".
Step 4 - View details of the transaction and choose either to own or disown the transaction.
Based on your response, the IT department takes decision on how to respond back to you.
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