Rules regarding quoting of PAN for specified transactions amended



Rules regarding quoting of PAN for specified transactions amended 
The Government is committed to curbing the circulation of black money and widening of tax base. To collect information of certain types of transactions from third parties in a non-intrusive manner, the Income-tax Rules require quoting of Permanent Account Number (PAN) where the transactions exceed a specified limit. Persons who do not hold PAN are required to fill a form and furnish any one of the specified documents to establish their identity.

              One of the recommendations of the Special Investigation Team (SIT) on Black Money was that quoting of PAN should be made mandatory for all sales and purchases of goods and services where the payment exceeds Rs.1 lakh. Accepting this recommendation, the Finance Minister made an announcement to this effect in his Budget Speech. The Government has since received numerous representations from various quarters regarding the burden of compliance this proposal would entail. Considering the representations, it has been decided that quoting of PAN will be required for transactions of an amount exceeding Rs.2 lakh regardless of the mode of payment.
             To bring a balance between burden of compliance on legitimate transactions and the need to capture information relating to transactions of higher value, the Government has also enhanced the monetary limits of certain transactions which require quoting of PAN. The monetary limits have now been raised to Rs. 10 lakh from Rs. 5 lakh for sale or purchase of immovable property, to Rs.50,000 from Rs. 25,000 in the case of hotel or restaurant bills paid at any one time, and to Rs. 1 lakh from Rs. 50,000 for purchase or sale of shares of an unlisted company. In keeping with the Government’s thrust on financial inclusion, opening of a no-frills bank account such as a Jan Dhan Account will not require PAN.  Other than that, the requirement of PAN applies to opening of all bank accounts including in co-operative banks.
             The changes to the Rules will take effect from 1st January, 2016.
The above changes in the rules are expected to be useful in widening the tax net by non-intrusive methods. They are also expected to help in curbing black money and move towards a cashless economy.
A chart highlighting the key changes to Rule 114B of the Income-tax Act is attached.


Sl.
NATURE OF TRANSACTION
MANDATORY QUOTING OF PAN (RULE 114B)
Existing requirement
New requirement
1.
Immovable property
Sale/ purchase valued at Rs.5  lakh or more
i.       Sale/ purchase exceeding Rs.10 lakh;
ii.     Properties valued by Stamp Valuation authority at amount exceeding Rs.10 lakh will also need PAN.
2
Motor vehicle (other than two wheeler)
All sales/purchases
No change
3.
Time deposit
Time deposit exceeding Rs.50,000/- with a banking company
i.      Deposits with Co-op banks, Post Office, Nidhi, NBFC companies will also need PAN;
ii.    Deposits aggregating to more than Rs.5 lakh   during the year will also need PAN
4.
Deposit with Post Office Savings Bank
Exceeding Rs.50,000/-
Discontinued
5.
Sale or purchase of securities
Contract for sale/purchase of a value exceeding Rs.1 lakh
No change
6.
Opening an account (other than time deposit) with a banking company.
All new accounts.
i. Basic Savings Bank Deposit Account excluded (no PAN requirement for opening these accounts);
ii. Co-operative banks also to comply
7.
Installation of telephone/ cellphone connections
All instances
Discontinued
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 cheques
Amount aggregating to Rs.50,000/- or more during any one day
Exceeding Rs.50,000/- on any one day.
10.
Cash deposit with banking company
Cash aggregating to Rs.50,000/- or more during any one day
Cash deposit exceeding Rs.50,000/- in a day.
11.
Foreign travel
Cash 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 card
Application to banking company/ any other company/institution for credit card
No change.
Co-operative banks also to comply.
13.
Mutual fund units
Payment of Rs.50,000/- or more for purchase
Payment exceeding Rs.50,000/- for purchase.
14.
Shares of company
Payment of Rs.50,000/-  or more to a company for acquiring its shares
i.      Opening a demat account;
ii.    Purchase or sale of shares of an unlisted company for an amount exceeding Rs.1 lakh per transaction.
15.
Debentures/ bonds
Payment of Rs.50,000/- or more to a company/ institution for acquiring its debentures/ bonds
Payment exceeding Rs.50,000/-.
16.
RBI bonds
Payment of Rs.50,000/-or more to RBI for acquiring its bonds
Payment exceeding Rs.50,000/-.
17.
Life insurance premium
Payment of Rs.50,000/- or more in a year as premium  to an insurer
Payment exceeding Rs.50,000/- in a year.
18.
Purchase of jewellery/bullion
Payment of Rs.5 lakh or more at any one time or against a bill
Deleted and merged with next item in this table
19.
Purchases or sales of goods or services
No requirement
Purchase/ sale of any goods or services exceeding Rs.2 lakh per transaction.
20.
Cash cards/ prepaid instruments issued under Payment & Settlement Act
No requirement
Cash payment aggregating to more than Rs.50,000 in a year.


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December, 2015 
The last date of payment of December 2015 installment of Advance Tax for both Corporate and Non-Corporate Taxpayers in the State of Tamil Nadu and Union territory of Puducherry has been extended from 15.12.2015 to 31.12.2015 in view of unprecedented rainfall and floods in these areas.

The Central Board of Direct Taxes(CBDT) has issued an Order under Section 119 (2)(a) of the Income-tax Act, 1961 in this regard.

As a result of this extension, Advance Tax deposited in the Government account on or before 31.12.2015 will be treated as payment within the statutory time for payment of December 2015 installment.

            A copy of the Order dated 15.12.2015 is available on the website of the Department www.incometaxinfia.gov.in.

*****
CBDT takes various significant decisions in last three months for providing better taxpayer services, improving ease of doing business and reducing the burden of compliance on the tax payer 

The Central Board of Direct Taxes (CBDT) has taken a number of decisions over last three months with the objective of providing better taxpayer services, improving ease of doing business and reducing the burden of compliance on the tax payer.
Some of the significant decisions taken are
·         Acceptance of A.P Shah Committee’s recommendations regarding applicability of MAT on Foreign Institutional Investors/Foreign Portfolio Investors (FII/FPI).
·         Decision that MAT will not apply to foreign companies having no PE in India.
·         Simplification of procedures for submission of Form No 15G and Form No 15H for furnishing self declaration for lower deduction or no deduction of tax.
·         Notification of Transfer Pricing Rules to incorporate “range concept” and use of “multi year data” to reduce litigation on transfer pricing issues.
·         Launching of “e-sahyog” Pilot Project to provide online facility to resolve mismatch of prepaid taxes in Income Tax Returns.
·         Setting up of Committee with a view to simplify the provisions of the Income Tax Act, 1961.
·         Phasing out plan of deductions under the Income Tax Act with reduction in tax rates for corporate taxpayers- extension of time for submission of comments.
·         Notification of Income Computation and Disclosures Standards (ICDS) under section 145(2) of the Income Tax Act.
·         Notification regarding income from off-shore Rupee Denominated Bonds.
·         Decision to expedite issue of refunds below Rs.50,000/- for A.Y. 2013-14 and    2014-15  for cases not selected for scrutiny.
·         Monetary limits for filing appeal by the Income Tax Department before Tribunal and High Courts enhanced from Rs.4 lakh and Rs.10 Lakh to Rs.10 lakh and Rs.20 lakh respectively with retrospective effect.
  ***********
CBDT takes Initiatives for reducing Tax Litigation as a part of its initiatives to reduce grievances of the taxpayers 

The Central Board of Direct Taxes (CBDT) has issued a Circular revising the monetary limits for filing of appeals by the Department with the objective of reducing litigation as a part of its initiatives to reduce grievances of the taxpayers.
The monetary limits for filing of appeals by the Department before the Income Tax Appellate Tribunal and the High Courts have been revised to tax effect of Rs. 10 Lakhs and Rs. 20 Lakhs, respectively, from the present limits of tax effect of Rs. 4 Lakhs and Rs. 10 Lakhs. The revised limits have been made applicable retrospectively to pending appeals also.  Directions have been issued that pending appeals which are below the revised monetary limits may be withdrawn or not pressed.
In another noteworthy decision, the CBDT has issued an Office Memorandum   directing Principal Chief Commissioners to constitute a collegium of Chief Commissioners of Income Tax comprising of two officers in their respective Regions. This collegium will consider withdrawal of appeals filed by the Department in cases involving tax effect above the revised monetary limit from the High Court(s) if no question of law is involved, the issue is considered settled by the Department or the appeal is no longer relevant in view of subsequent amendment.
These two decisions are expected to reduce pending litigation filed by the Department by    50 percent and provide relief to taxpayers facing long standing litigation.

Circular No.21/2015 and  O.M.  bearing F.no.279/Misc/52/2014-(ITJ) are available on the website of the Departmentwww.incometaxindia.gov.in .

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Year End Review: Highlights of the Major Acheivements of the Department of Financial Services (DFS), Ministry of Finance 
Department of Financial Services (DFS), Ministry of Finance is a nodal department as far as banking and insurance sector in the country is concerned. In the current fiscal, Department of Financial Services has taken various initiatives and launched different Financial Inclusion & Social Security related Schemes in its pursuit of achieving the goal of Universal Financial Inclusion.
The major achievements of the Department during the Current Fiscal are as follows :
1.      PRADHAN MANTRI JAN DHAN YOJANA (PMJDY) : "Mera Khata - Bhagya Vidhaata"


The biggest financial inclusion initiative in the world was announced by the Prime Minister on 15th August 2014 and Mega launch was done by him on 28th August 2014 across the country. This National Mission on Financial Inclusion has an ambitious objective of covering all households in the country with banking facilities and having a bank account for each household. It has been emphasized by the Prime Minister that this is important for including people left-out into the mainstream of the financial system.

The Government started the PMJDY to provide 'universal access to banking facilities' starting with "Basic Saving Bank Account" with an overdraft upto Rs.5000 subject to satisfactory operation in the account for six months and RuPay Debit card with inbuilt accident insurance cover of Rs. 1 lakh .

Achievements
·      As on 11th November 2015, Banks have opened 19.21 Crore accounts under PMJDY with deposit of more than 26819 crores. Rupay cards issued to 16.51 Cr. customers.
·      Two lakh accounts are opened per day


·      As on13th November 2015 more than 45.98 lakhs accounts have been offered Overdraft facility. Out of these overdraft facility has been availed by 8.86 lacs account holders amounting to Rs. 124.95 Lacs.
·      1336 Claims of Life cover of Rs.30000 and 333 Claims of accident insurance cover of Rs. 1 lakh have been paid till 13thNovember 2015.
·      Zero balance accounts in PMJDY have declined from 76% to 36.50 % from September 2014 to 11th November 2015.
·         For providing Banking access in the country, out of total 159920 Sub-Service Areas (SSAs), 126003 SSAs have been covered through fixed location Bank Mitrs & 33100 SSAs have been covered through branches as on 13th November 2015. 817 SSAs are uncovered due to connectivity issue.
·         To ensure universal banking access more than 1.26 lakh Bank Mitrs have been deployed with on- line devices capable of e-KYC based account opening and significant number with interoperable payment facility.
·      Jan Dhan Yojana features in Guinness Book of World Records: Guinness World Records recognised the achievements made under PMJDY for opening   18,096,130 accounts by Banks in a week (from 23 to 29 August, 2014) as a part of Financial Inclusion Campaign. 
·      Payment of wages under MNREGA: More than Rs 4273 crore have been routed through these accounts till June 2015 towards payment of wages under MNREGA. (Source: MNREGA, Ministry of Rural Development).
·      DBTL transactions: Transfer of subsidy of more than Rs 17446 crore through Jan Dhan accounts from November 2014 to 31stJuly 2015. (Source: Ministry of Petroleum & Natural Gas).

Pradhan Mantri Jan - Dhan Yojana 
(Accounts Opened as on 02.12.2015)

(All Figures in Crores)
Bank Name
RURAL
URBAN
TOTAL
NO OF RUPAY CARDS
AADHAAR SEEDED
BALANCE IN ACCOUNTS
% OF ZERO-BALANCE-ACCOUNTS
Public Sector Bank
8.39
6.80
15.20
13.46
7.03
21450.31
34.54
Regional Rural Bank
2.99
0.50
3.49
2.51
0.98
4683.38
32.09
Private Banks
0.44
0.29
0.73
0.64
0.23
1149.36
41.10
Total
11.82
7.60
19.41
16.61
8.24
27283.06
34.31



2.      PRADHAN MANTRI MUDRA YOJANA (PMMY)  : “ FUND THE UNFUNDED


In the Union Budget 2015-16, the Finance Minister proposed to create a Micro Units Development Refinance Agency (MUDRA) Bank.   Pradhan Mantri Mudra Yojana (PMMY) has been launched by the Prime Minister on 8th April, 2015 to provide formal access to credit for Non –Corporate Small Business Sector. Any Indian Citizen who has a business plan for a non-farm sector income generating activity such as manufacturing, processing, trading or service sector and whose credit need is less than10 lakh can approach either a Bank, MFI, or NBFC for availing of MUDRA loans under Pradhan Mantri Mudra Yojana (PMMY).



Categories of loans:

Ø           Loans  upto Rs. 50,000                                           -         Shishu                                 
Ø           Loans above Rs.50, 000 and upto  Rs. 5.0 lakh     -          Kishore                   
Ø           Loans above Rs.5.0 lakh and upto Rs. 10 lakh       -         Tarun  

                       
MUDRA Card is an innovative credit product wherein the borrower can avail of credit in a hassle free and flexible manner. Public Sector Banks have been allocated a total target of Rs.70,000 crore, and private sector/ Foreign Banks a target of Rs 30000 cr. The RRBs were given a target of Rs 22000 crore. All together, the target for loan disbursement under PMMY for F.Y 2015-16 is fixed at 1,22,000 crore.

 

 

Achievements 

 

·         Total Amount disbursed under PMMY- Rs. 45948.28 crore as on 25.11.2015.
·         Total No of borrowers-66,00,241
·         Women borrowers-23,50,542 
·         New Entrepreneurs- 3286094
·         SC/ST/OBC borrowers- 2201944
·         Total  Mudra Card issued - 198499


·         No of Shishu Loans have nearly gone-up nearly six fold (from 7.2 lac to 47 Lac) and the amount disbursed shows a 283% hike. (from  Rs. 1835 Cr. to Rs 7046 Cr.)
·         In the Kishore loan category, disbursements have increased by 91% (from Rs. 8156 Cr. to Rs. 15704 Cr.)
·         In the Tarun Loan category, disbursements have increased by 21% (from Rs. 7851 Cr. to Rs. 9501 Cr.)

JAN DHAN SE JAN SURAKSHA

3.      ATAL PENSION YOJANA (APY)



The Government of India has introduced a pension scheme called the Atal Pension Yojana (APY), with effect from 1st June, 2015, pursuant to the announcement in the Budget for 2015-16 on creating a universal social security system for all Indians, especially the poor, the under-privileged and the workers in the unorganised sector. APY is being administered by the Pension Fund Regulatory and Development Authority (PFRDA) under the overall administrative and institutional architecture of the National Pension System (NPS).

APY is being operationalised through CBS enabled Banks. Public Sector Banks, Private Sector Banks, Regional Rural Banks, Apex Cooperative Banks and District Central Cooperative Banks have already started the process of mobilization and registration of the subscribers’ under Atal Pension Yojana.


Achievements:

A total of 10.35 lakh subscribers have been enrolled under the Scheme as on 24.11.2015.


4. PRADHAN MANTRI SURAKSHA BIMA YOJANA (PMSBY)



The Pradhan Mantri Suraksha BimaYojana (PMSBY) is a one year personal accident insurance scheme, annually renewable offering coverage of Rs. two lakh for death or permanent total disability and Rs. one lakh for permanent partial disability due to an accident. It is available to people in the age group of 18 to 70 years.

        Subscription material made available in all regional languages.
        An exclusive website www.jansuraksha.gov.in created by DFS with all relevant material / information, including forms, FAQs etc.
        State wise toll free numbers allotted to respond to queries of the customers.

Achievements

          Gross enrolment reported by Banks is 9.16 crore under PMSBY as on 24.11.2015.
                    Under PMSBY the share of Public Sector Banks (including RRBs) is 93.2%.
·         As on 23.11.2015, 1491Claims were registered under PMSBY, 740 have been disbursed. 


5. PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA (PMJJBY)




The Pradhan Mantri Jeevan Jyoti BimaYojana (PMJJBY) is a one year life insurance scheme, annually renewable offering coverage of Rs. two lakh for death due to any reason and is available to people in the age group of 18 to 50 years (life cover up to age 55 on payment of premium after enrolment up to age 50 years).

        Subscription material made available in all regional languages.
        An exclusive website www.jansuraksha.gov.in created by DFS with all relevant material / information, including forms, FAQs etc.
        State wise toll free numbers allotted to respond to queries of the customers.

Achievements

          Gross enrolment reported by Banks is 2.86 crore under PJJSBY as on 24.11.2015.
                    Under PMJJBY the share of Public Sector Banks (including RRBs) is 91%.
·         As on 23.11.2015, 8558 were registered under PMJJBY, 5955 have been disbursed. 



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