Recent Amendments To Income-Tax Rules

Recent Amendments To Income-Tax Rules 
(From CA Milind Gandhi)  

Quoting of PAN
· Rule 114B of the Income-tax Rules requires quoting of PAN number for various transactions like purchase of property, purchase of vehicle, opening bank account etc.
· With effect from 1^st January 2016 following transactions will require quoting of PAN number:

• Sale of goods exceeding Rs. 2 Lacs in value;
• Sale of services exceeding Rs. 2 Lacs in value;
• Sale of shares of an unlisted company exceeding Rs. 1 Lac in value

·  The Rule requires quoting PAN number on documents pertaining to the said transactions. Accordingly, bills/invoices for sale of goods and services will have to mention PAN of the parties involved. While, PAN will have to be quoted on letters or agreements executed for sale of shares of unlisted companies.
· In case if the party does not have a PAN, then the goods seller or service provider will have to obtain from the party a declaration in Form 60. And particulars of the said declaration will have to be filed with the IT Department in Form 61.  
· In case of sale of goods or services, quoting of  PAN is not mandatory if the counter party is NRI.   
· The Income-tax Act provides a penalty of Rs. 10,000 for every default in compliance to Rule 114B. 
 

 
 
Information to IT Department
· Rule 114E requires a person to file information of certain transactions with the IT Department in Form 61A (like purchase of property, cash deposits in bank, purchase of shares & mutual funds etc.).  
· With effect from 1^st April 2016 following transactions will also have to be reported to the IT Department:

• Receipt of share application monies by a company exceeding Rs. 10 Lacs in a financial year
• Buy back of shares by a company exceeding Rs. 10 Lacs in a financial year
• Receipt of cash payment exceeding Rs. 2 Lacs towards sale of goods or services (applicable to those covered by tax audit)

· The information of the said transactions as required by Form 61A is to be filed with the IT Department on a yearly basis (within 2 months of the end of the financial year).  
· The Income-tax Act provides a penalty of Rs. 100 per day in case of delay in filing of Form 61A.  

 
For this information update CAP thanks -

Milind Gandhi, Gandhi & Associates - Chartered Accountants