Rule 114B: 18 PAN Thresholds + Form 60

HRAReceipt.in maintains this Rule 114B reference for FY 2026-27, drawn from the official rule and the current CBDT thresholds. Rule 114B of the Income Tax Rules, 1962 makes PAN-quoting mandatory across 18 transaction categories. The most common tripwires: cash deposits above Rs. 50,000 in a day, time deposits above Rs. 50,000, cash payments to dealers above Rs. 2,00,000, and immovable property transactions above Rs. 10,00,000. Where the payer fails to furnish PAN, Section 206AA of the Income Tax Act forces the higher of the prescribed rate or a flat 20% TDS deduction. The obligation is on the person entering the transaction (not the service provider), but in practice the recipient of payment must collect PAN to comply with TDS rules and for their own audit protection.

If you are a business owner, freelancer, or service provider:

1. GST audit: Auditors cross-verify your invoices/receipts against the buyer's records. PAN linkage helps reconcile.

2. TDS applicability: If your service crosses TDS thresholds (194C, 194J), the payer must deduct tax under your PAN.

3. High-value scrutiny: The IT department uses the Annual Information Statement (AIS) and Specified Financial Transactions (SFT) reporting to track large transactions. Receipts without PAN make your book-keeping harder to defend.

4. Protection from denial: If a payer later claims non-payment, a receipt with their PAN makes denial very difficult.

If the payer refuses to furnish PAN, note "PAN not provided" on the receipt. For TDS purposes, deduct TDS at 20% instead of the normal rate (under Section 206AA). The higher deduction incentivises compliance.

For transactions not involving TDS, note the refusal. You are not legally prevented from completing the transaction. You do lose audit protection if the transaction is later questioned.

You do not need to turn every transaction into a compliance exercise. A sensible approach:

- Below Rs. 10,000: no PAN needed, a simple payment receipt is sufficient

- Rs. 10,000 to Rs. 50,000: ask for PAN, note "not provided" if refused

- Above Rs. 50,000 (cash) or Rs. 2,00,000 (digital): PAN is strongly advisable and TDS rules likely apply. See TDS sections 194C, 194J, 194IB explained

- Above Rs. 1,00,000 for professional services: TDS under 194J applies and PAN is mandatory for correct deduction

- Cash receipts of Rs. 2 lakh+ from a single person: prohibited under Section 269ST (100% penalty on the recipient)

Keep a GST-compliant tax invoice plus a payment receipt on file with payment mode, amount, and purpose visible. This alone resolves 90% of disputes.