From April 1, PAN will be required only for property transactions above Rs 20 lakh. The provision is part of the new Income Tax Act, which will come into effect from the new financial year. The Finance Ministry made the announcement on the day the rule was passed.
PAN was currently mandatory for transactions above Rs 10 lakh for tax purposes and monitoring when selling property. The limit was raised with the aim of focusing on large transactions instead of small ones.
Meanwhile, the Income Tax Department has dropped the move to require PAN number at the time of taking out an insurance policy. The new rule also retains the provision that PAN needs to be provided only if the total premium paid in a financial year is Rs 50,000. Although the draft rule included a provision that PAN should be provided at the time of opening an insurance account, it was decided to continue the status quo in the final notification.
Finance Minister Nirmala Sitharaman inaugurated the revised website as part of the new law coming into force. Website: www.incometaxindia.gov.in.
Children’s education: Exemption limit increased
- The tax exemption limit for children’s education allowance under the old income tax scheme has been increased. Currently, the tax exemption was applicable to allowance up to Rs 100 per month per child. This limit has been increased to Rs 3,000. Only 2 children will be eligible for the exemption.
- You only need to provide a PAN number if you buy a vehicle worth more than Rs 5 lakh. Currently, you had to provide a PAN for any vehicle worth more than Rs 5 lakh, except for two-wheelers. The new system includes two-wheelers as well. The limit of Rs 5 lakh also applies to them.
- The limit for hotel/restaurant bills, convention center/banquet hall expenses, event management, etc. has been increased from Rs 50,000 to Rs 1 lakh.
- For deposits in banks and post offices, currently, PAN is required if you deposit Rs 50,000 per day. Now, PAN is required only if the total deposit in a financial year is above Rs 10 lakh. The rules will be similar for bank withdrawals.
- Those paying rent of more than Rs 1 lakh per year must necessarily provide the PAN number of the house owner. If the tenant is related to the house owner, that too should be clarified.
- Bengaluru, Pune, Ahmedabad and Hyderabad have been added to the list of cities where the higher tax exemption (50%) related to House Rent Allowance (HRA) is applicable. Till now, only those living in Delhi, Mumbai, Kolkata and Chennai had the 50% exemption. All other cities have the exemption of up to 40%.
