PAN, Aadhar, Form-60 and 61

Overview

Today, when you decide to enter into any transaction with a banking institution or deal in some sort of assets then PAN Card is the basic identity proof that is required. Permanent Account Number (PAN) is basically a unique all-India number that serves as a proof of identity of a taxpayer and it helps link all information pertaining to a particular taxpayer through the computer system. This helps them in tracking tax evasions, tax frauds, and illegal transactions.

In certain situations, when a person entering into transactions specified in Rule 114B who does not have PAN may submit a declaration in Form 60 along with other supporting documents.

PAN-Aadhar Interchangeable

However, as per the Notification No. 59/2019 dated 30th August 2019 Central Board of Direct Tax has prescribed if a person does not have PAN, but have Aadhar Card, and he has furnished or quoted his aadhar number in lieu of PAN in accordance with subsection (5E) of Section 139A of the Income Tax Act, shall be deemed to have applied for allotment of PAN.

So it is really important to consider the Notification No. 59/2019 before understanding Form 60. Because if the Aadhar is quoted in place of PAN, then Form 60 has to be reported for that transaction is the real question.

What is Form – 60?

Form 60 is a declaration to be filed by an individual or a person (not being a company or firm) who does not have a permanent account number and who enters into any transaction specified in rule 114B of Income Tax Act, 1962. Hence, any persons who do not have PAN while entering into certain transactions must file Form 60.

When it is required to submit Form – 60?

Form 60 must be furnished for these transactions when a concerned person does not have a PAN/Aadhar or has a pending PAN allotment (Transactions specified in Rule 114B)

Nature of Transaction	Value of Transaction
Sale or purchase of a motor vehicle or vehicle other than two wheeled vehicles	Any Value ( No limit is Prescribed)
Payment to a hotel or restaurant against a bill or bills at any one time.	Payment in cash of an amount exceeding Rs 50,000.
Payment to a Mutual Fund for purchase of its units.	Amount exceeding Rs 50,000.
Payment to a company or an institution for acquiring debentures or bonds issued by it.	Amount exceeding Rs 50,000.
Payment to the Reserve Bank of India for acquiring bonds issued by it.	Amount exceeding Rs 50,000.
Payment as life insurance premium to an insurer	Amount aggregating to more than Rs 50,000 in a financial year.
A contract for sale or purchase of securities (other than shares)	Amount exceeding Rs 100,000 per transaction.
Sale or purchase, by any person, of shares of a company not listed in a recognized stock exchange.	Amount exceeding Rs 100,000 per transaction.
Sale or purchase, by any person, of goods or services of any nature other than immovable property.	Amount exceeding Rs 2,00,000 per transaction
Sale or purchase of any immovable property.	Amount exceeding Rs 10,00,000
Deposit with, – banking company or a co-operative bankPost Office.	Cash deposits exceeding Rs 50,000 during any one day
A fixed deposit with,- a banking company or a co-operative banka Post Officea Nidhi Companies ora non-banking financial company	Amount exceeding Rs 50,000 or aggregating to more than Rs 500,000 during a financial year.
Opening of demat account	Any Value ( No limit is Prescribed)
Opening an account with any banking institution or bank other than basic savings deposit account	Any Value ( No limit is Prescribed)
Application to institution or bank or company for debit or credit card	Any Value ( No limit is Prescribed)
Payment in connection with travel to any foreign country	Exceeding Rs. 50,000 at one time
Purchasing Bank Draft/ pay order/ banker’s cheque	Cash exceeding Rs 50,000 in one day

May a Form – 60 is substituted PAN in all cases?

Well, Form 60 is recourse to furnishing PAN but, NOT in every scenario. It is just for the sake of users government has provided us some relaxation, for a particular class of transactions.

What is the applicability of Rule 114B on Minor?

In case of a minor entering into any above transaction and he doesn’t have PAN, the PAN of the guardian or Form 60 as the case may be must be provided along with the application.

Is it mandatory to file Form – 60 for NRIs?

Yes, it is mandatory but only for some transactions mentioned in Rule 114B. But Non Residents are exempt from few of the transactions specified above such as while applying for credit or debit card, payment to restaurants or hotels against bill etc. 

Form-61

The Rule 114D have prescribed the time and manner in which the declarations received in Form 60 by the concerned persons have to be filed with the Income Tax Department. These have to be submitted in Form 61. The form 61 is basically a Statement containing particulars of declaration received in Form No. 60.

Due date for submitted Form – 61:-

The Form 61 has to be filed half yearly. The due dates prescribed for furnishing form 61 are as below:

Consequences of not submitting Form – 61:-

If a person fails to comply with the provisions for submission of Form 61, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of Rs 10,000.

Consequences of wrong filling of Form – 60:-

As per the Income-tax Act 1962, if a person who is required to furnish Form – 60 provides inaccurate information,  he may be subject to imprisonment from three months to two years along with a fine. If the amount involved is greater than Rs.25 lakh, imprisonment from six months to seven years along with a fine can be imposed for the false declaration made.

Conclusion

Every Person, who have PAN, must submit PAN for all the transactions specified under Rule 114B.

Every person, who does not have PAN but have Aadhar, must furnish his/her Aadhar for all the transactions specified under Rule 114B.

Every Person who neither has PAN nor Aadhar must submit Form 60 for all the transactions specified under Rule 114B.

Every Person, who are receiving Form 60, must furnish the details in Form 61 semi-annually