Non Pan Transactions

Quoting PAN number for some financial transactions has been mandatory for a couple of years in India now. For transactions involving smaller amounts of money, PAN Card need not always be quoted. But high value financial transaction needs a PAN attached with 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.

Which Transactions are Considered High Value Non PAN?

Not all financial transactions are considered as 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.

  • Cash deposits adding up to Rs.10 lakh or more in your Savings Bank Account or Post Office Account in a financial year.
  • One or more term deposits (all fixed deposits other than those made through a renewal of an old and matured term deposit) by a person adding up to Rs.10 lakh or more than that in a given financial year.
  • Payments of Credit Card of amounting to greater than Rs.1 lakh by cash or more than Rs.10 lakh in any other mode within a year.
  • Purchasing units of mutual fund worth equal to or more than Rs.10 lakh.
  • Investing in Debentures/Bonds with Rs.10 lakh or more.
  • Purchasing shares worth equal to or more than Rs.10 lakh.
  • Buying/selling an immovable property valued at more than Rs.30 lakh.
  • Cash payments made for purchasing bank drafts/money orders/banker’s cheque adding up to Rs.10 lakh or more in a given financial year.
  • Payments made in cash for purchasing Reserve Bank of India issued prepaid instruments, adding up to more than Rs.10 lakh within a financial year.
  • Cash transactions adding up to more than Rs.50 lakh within a financial year, from one or more current account held by a person.
  • Cash payment of more than Rs.2 lakh for purchasing goods/services of any nature.
  • Foreign currency sale worth more than Rs.10 lakh, including crediting foreign currency to foreign exchange card, spending in foreign currency via a debit/credit card, traveler’s cheque/draft or any such instrument within a financial year.
  • Buying back shares from any person (other than those bought from open market) for a total value of Rs.10 lakh or more in a given financial year.

What will happen if you conduct a High Value Non PAN Transaction?

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.

  • In case of dealings in credit card and cash, reporting is done by Banks or Post Office involved in the transaction.
  • In case of purchasing shares or fund units, reporting is done by Mutual Fund Companies, bonds/debentures issuing institution or company, public or rights share issuing companies.
  • In case of transactions involving property, reporting is done by Registrar/Sub-Registrar.
  • in case of purchasing RBI bonds, the reporting is done by the RBI Officer.

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.

Online method of owning or responding to IT notices for High Value Non-PAN Transaction?

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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