Rule 114B

Transactions Are Under Rule 114b

This rule deals with transactions which 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(PAN) in all documents that deal with transactions mentioned in the table below.

All Mentioned Transactions Are Under Rule 114b

Sl. no. Nature of said transaction Value of said transaction
1. Purchase or sale of a motor vehicle or vehicle, as defined in clause (28) of section 2 of Motor Vehicles Act, 1988 (59 of 1988) that needs registration by a registering authority under Chapter IV of said Act, other than vehicles that are two wheeled. All such transactions
2. Opening account (other than a fixed-deposit referred to at Sl. No.12 and Basic Savings Bank Deposit Account) with a co-operative bank or banking company to which the Banking Regulation Act of 1949 (10 of 1949) is applicable (including banking institutions or banks referred to in section 51 of said Act). All such transactions
3. Making application to a co-operative bank or a banking company to which Banking Regulation Act of 1949 (10 of 1949) is applicable (including banking institutions or banks referred to in section 51 of said Act) or to other institution or company for the issue of a debit card or credit card. All such transactions
4. Opening a demat account with a participant, depository, custodian of securities or another person who has been registered under sub-section (1A) of section 12 of the Securities and Exchange board of India Act of 1992 (15 of 1992). All such transactions

For payments made in cash that exceed an amount of Rs.50,000

Sl. no. Nature of said transaction Value of said transaction
3. Payment to a restaurant or hotel against a bill or bills at one given point of time. Cash payment that exceeds Rs.50,000
4. Payment regarding travel to countries or abroad or payment made for purchasing foreign currency, at any given point of time. Cash payment that exceeds Rs.50,000

Payment exceeding Rs.50,000

Sl. no. Nature of said transaction Value of said transaction
5. Payment to purchase units of a Mutual Fund. Payment that exceeds Rs.50,000
6. Payment made to an institution or a company for the purpose of procuring bonds or debentures issued by it. Payment that exceeds Rs.50,000
7. Payment made to the Reserve Bank of India, constituted under Section 3 of the Reserve Bank of India Act of 1934 (2 of 1934) in order to acquire bonds issued by it. Payment that exceeds Rs.50,000

Other transactions comes under Rule 114B

Sl. no. Nature of said transaction Value of said transaction
10. Deposit with - Post Office Co-operative or banking company to which Banking Regulation Act of 1949 (10 of 1949) is applicable (including banks or banking institution referred to in section 51 of said Act). Cash deposits that - Exceed Rs.50,000 in one day, or Aggregates to over Rs.2,50,000 between November 9, 2016 and December 30, 2016
11. Purchase of pay orders or bank drafts or banker’s cheques from a co-operative bank or banking company to which the Banking Regulation Act of 1949 (10 of 1949) is applicable (including banks or banking institution referred to in section 51 of said Act). Cash payment for amounts that exceed Rs.50,000 during one day.
12. Time deposit with - Post office Co-operative bank or banking company to which Banking Regulation Act of 1949 (10 of 1949) is applicable (including banks or banking institution referred to in section 51 of said Act). Nidhi referred to in section 406 of Companies Act of 2013 (18 of 2013) A non-banking financial company that holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934), to accept or hold deposit from public. Amount exceeding Rs.50,000 or aggregates to over Rs.5 lakh during one financial year.
13. Payment for one or more than pre-paid payment instruments, as defined in policy guidelines for the operation and issue of prepaid payment instruments that are issued by the Reserve Bank of India under section 18 of the Payment and Settlement Systems Act of 2007 (51 of 20070, to a co-operative bank or banking company to which Banking Regulation Act of 1949 (10 of 1949) is applicable (including banks or banking institution referred to in section 51 of said Act), or to another institution or company. Cash payment or bank draft or banker’s cheque or pay order of an amount that aggregates to over Rs.50,000 in one financial year.
14. Payment as life insurance premium to insurer as defined as clause (9) of section 2 of the Insurance Act of 1938 94 of 1938). Amount aggregating to more than Rs.50,000 in one financial year.
15. A contract for purchase or sale of securities, other than shares, as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act of 1956 (42 of 1956). Amount that exceeds Rs.1 lakh per transaction.
16. Purchase or sale of shares of company that has not been listed in a recognised stock exchange by anyone. Amount exceeding Rs.1 lakh per transaction.
17. Purchase or sale of immovable property. Amount exceeding Rs.10 lakh or valued in excess of the said amount by stamp valuation authority as per section 50C of the Act.
18. Purchase or sale, by any individual, of goods and services of nature other than those mentioned above. Amount exceeding Rs.2 lakh for one transaction.

Conditions for the above are as follows

In case an individual who enters into any transactions mentioned in Rule 114B is a minor and does not have an income that is chargeable to income tax, he/she will have to quote the permanent account number of his/her father/mother/guardian in the document pertaining to the transaction.

In case any individual who does not have a permanent account number and enter into any transaction mentioned in the rule, he/she will have to make a declaration in Form 60 providing the particulars of this transaction. The particulars can be provided in paper or in electronic form that falls in line with the procedures, data structure and standards laid down by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems).

The provisions of Rule 114B will not apply to the following persons

  • State Government, Central Government and Consular Offices
  • Non-residents referred to in clause (300 of section 2 of the Act with respect to transactions other than the one mentioned in Sl.no. 1, Sl.no. 2, Sl.no. 4, Sl.no. 7, Sl.no. 8, Sl.no. 10 or Sl.no. 12 or Sl.no. 14 or Sl.no. 15 or Sl.no. 16 or Sl.no. 17 of the Table above.

Person having an account (other than fixed deposit or a basic savings account) with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies and has not quoted his/her PAN or furnished Form No. 60 at the time of opening the account needs to furnish one of the above documents to the person specified as per clause (c) of sub-rule (1) of rule 114C.

Glossary on 114B

‘Payment in connection with travel’ refers to payment made towards a travel agent, tour operator, travel agent or authorised person who is defined in clause ( c ) of section 2 of the Foreign Exchange Management Act of 1999 (42 of 1999).

‘Tour Operator or Travel Agent’ refers to an individual who makes arrangements for surface, air or maritime travel or provides services that are related to accommodation, entertainment, tours, visa, passport, foreign exchange, travel insurance or other travel related services, either in a package or severally.

‘Time Deposit’ – It refers to any deposit that is repayable at the expiry of a fixed deposit.

Other Income Tax Rules

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