PAN Card No. mandatory for purchasing Jewellery worth 5 Lakhs or more

To keep a curb on Black Money and Investments through Black Money, the Govt has w.e.f. 1^st July 2011 made it mandatory to furnish PAN Card No. for all transactions involving purchase of Jewellery over Rs. 5 Lakh.

The Amendment to section 114B of the Income Tax Act, 1962 brought in vide Notification No. 27/2011 [F. NO. 149/122/2010-SO(TPL)], dated 26-5-2011 has been introduced as a high proportion of the Black Money on which Tax has not been paid is found to have been invested in Jewellery and Real Estate.

The Income Tax Department has already sent a communication to all jewellery dealers, bullion traders, nationalised and private banks which are distributing debit cards.

CBDT has now incorporated new transactions under Rule114Bof the Income Tax Act which will require PAN for these transactions. The rule also stated that the PAN number is necessary for use of debit card, insurance payments exceeding Rs 50,000 a year, buying jewellery or bullion exceeding Rs 5 lakh.

The transactions that already require PAN are: -

1. Sale or Purchase of any Immovable Property valued at Rs.5 lakh or more
2. Sale or purchase of a motor vehicle
3. Any Time Deposit (E.g. – Fixed Deposit), exceeding Rs 50,000
4. Contract of a value exceeding Rs. 10 Lakh for sale or purchase of securities
5. Making an Application for Installation of a Telephone Connection
6. Any one time Payment to Hotels and Restaurants against their bills for an amount exceeding Rs. 25,0000

Provided that a person shall quote General Index Register Number in the documents pertaining to transactions specified above till such time the permanent account number is allotted to him.

Provided further that where a person, making an application for opening an account referred above is a minor and who does not have any income chargeable to income-tax, he shall quote the permanent account number or General Index Register Number of his father or mother or guardian, as the case may be, in the document pertaining to the transactions referred above

Provided also that any person, who has not been allotted a permanent account number or who does not have a General Index Register Number and who makes payment in cash or otherwise than by a crossed cheque drawn on a [bank or through credit card issued by any bank] in respect of any transaction specified above, shall make a declaration in Form No. 60 giving therein the particulars of such transaction.