Where Is PAN Mandatory, and What Happens If You Don't Give It?

Who doesn't need to quote PAN?

Rule 159 itself names a few exceptions:

• Governments and consulates: the Central Government, State Governments and consular offices don't have to quote PAN.
• Non-residents: they are excused only for rows 1 (credit card), 3 (RBI bonds), 15 (hotel and event cash bills) and 16 (other goods and services).
• Minors: a minor with no taxable income quotes the PAN of a parent or guardian. A child can also have their own PAN; see PAN for minors.
• Basic Savings Bank Deposit accounts: these are left out of row 12.
• IFSC banking units: some non-residents and foreign companies with no taxable income in India get relief for deals with banks in an International Financial Services Centre.

Companies and firms generally can't use Form 97 (the only exception is a narrow IFSC case for foreign companies). A company or firm doing these transactions needs its own PAN; see PAN for companies and firms.

What is Form 97, and when can't you use it?

Form 97 is a declaration for people who don't have PAN. It replaced Form 60 on 1 April 2026. You fill it at the bank, registrar, seller or insurer instead of quoting PAN.

When Form 97 is allowed

• Only for rows 11 to 16: property up to ₹45 lakh, a normal bank account, fixed deposits, insurance, hotel or event cash bills, and other goods or services.
• Only if you are not a company or a firm.
• Only if you truly have no PAN. If you have one, you must quote it.
• Is your estimated income above the tax-free limit? Then the notes on the form (as banks publish it) say you should apply for PAN. Write the application date and acknowledgement number on Form 97.

When Form 97 is not allowed

• For rows 1 to 10 (credit card, demat, bonds, mutual funds over ₹50,000, cash ₹10 lakh+, vehicles over ₹5 lakh, unlisted shares). Rule 159 says you must apply for PAN.
• For property over ₹45 lakh. You must apply for PAN.

What Form 97 asks for

The form, as banks publish it, asks for your name, date of birth, father's name, Aadhaar number, addresses, the transaction details and your ID and address proof. If you have applied for PAN, you can give the application date and acknowledgement number instead of proof. Forms 93–96 for applying are explained in our forms guide.

What happens if you don't give your PAN?

Apart from the transaction rules, the Income-tax Act, 2025 has a separate rule for TDS (tax deducted at source) and TCS (tax collected at source). It is section 397(2), which broadly does the job of the old sections 206AA and 206CC. Anyone who receives income with TDS, or pays an amount with TCS, must give a valid PAN.

Example: your bank deducts TDS on FD interest. If the bank has no valid PAN for you, it deducts at least 20%. A Form 121 you submitted would also be invalid. Extra tax deducted can generally be claimed in your income-tax return, which needs a PAN.

What about an inoperative PAN?

A PAN that is not linked with Aadhaar, when it should be, becomes inoperative. You then get no refund, no interest on refunds for that period, and higher TDS/TCS. Linking with the ₹1,000 late fee makes it operative again within 30 days. Read the full guide: inoperative PAN: effects and reactivation.

What is the penalty for not quoting PAN or quoting a wrong one?

Section 467 of the Income-tax Act, 2025 covers failures under section 262 (the PAN section). A penalty of ₹10,000 may be imposed by the Assessing Officer (AO, your tax officer):

• for not following section 262, such as not applying for PAN when you must;
• per default, for not quoting or not authenticating PAN in a document where it is required;
• per default, for knowingly quoting a false PAN or Aadhaar number;
• per default, on the receiver (bank, registrar, seller) who fails to make sure PAN is correctly quoted.

So a seller who skips PAN on several bills over ₹2 lakh could face several penalties. If you get a notice, reply on time and keep your records. Ask a tax adviser or your AO if you are unsure; see find your AO code.

What do banks, post offices and investment platforms ask for?

Bank and post office accounts

A normal savings or current account needs PAN or Form 97. Basic Savings Bank Deposit accounts are left out. Banks usually ask to link PAN with existing accounts too; see link PAN with your bank account.

Cash limits

PAN is needed when your cash deposits reach ₹10 lakh or more in a financial year (1 April to 31 March). The same ₹10 lakh test applies to cash withdrawals. The amounts are added up over the financial year, at a bank, co-operative bank or post office. Form 97 is not allowed for these.

Fixed deposits and interest

A time deposit over ₹50,000, or over ₹5 lakh in total in a year, needs PAN or Form 97. Separately, interest above the TDS limit is taxed at the higher rate if your PAN is missing or invalid.

Mutual funds, shares and demat

Opening a demat or broking account always needs PAN under Rule 159. Mutual fund purchases over ₹50,000 need it too. SEBI's KYC rules generally require PAN for investing in securities markets, with only narrow exceptions. Check your status in our PAN KYC status guide.

What should you check before a big transaction?

Two common hold-ups are an inoperative PAN and a name that doesn't match your PAN record. A few minutes of checks beforehand can save a lot of trouble.

1. Check whether PAN is needed

   Find your transaction in the table above. Note the limit and whether Form 97 is allowed.

   You'll know it worked when you know which document to carry: PAN card, e-PAN or a filled Form 97.

2. Confirm your PAN is operative

   On the e-Filing portal, use Link Aadhaar Status or Verify PAN Status. If the PAN is inoperative, link it with Aadhaar first. See link PAN with Aadhaar.

   If it shows inoperative: pay the ₹1,000 fee and link. The PAN becomes operative again within 30 days of linking, so plan ahead.

3. Match your name and date of birth

   The receiver checks your PAN against your name. Use Verify PAN Status on e-Filing; it needs PAN, name, date of birth and mobile, and only shows information. Our verify PAN guide explains the steps.

   You'll know it worked when the portal shows your PAN as active and the details match.

   If the name differs: fix it before the deal with Form CR-01. See PAN correction. Spelling differs between PAN and Aadhaar? Our PAN vs Aadhaar name checker helps you judge the difference.

4. Quote the correct PAN

   Write all 10 characters clearly. Check the 4th letter: P for a person, C for a company, H for an HUF. For a joint purchase, each buyer should usually quote their own PAN.

5. Keep the receipt

   Keep the bill, deed or account form showing your PAN. Later, check your AIS on e-Filing to see that the deal appears under your PAN, not someone else's.

   You'll know it worked when your TDS appears in Form 26AS or AIS against your PAN.

You don't have PAN yet: what should you do?

If your deal is in rows 1–10, or property over ₹45 lakh, you need a PAN. The fastest route for most adults is Instant e-PAN with Aadhaar, which is free. Otherwise apply on Form 93 (₹107 with a printed card, ₹72 for e-PAN only).

1. Check for an old PAN first

   Look at old tax returns, salary slips, bank KYC or Form 16. Applying twice creates a duplicate PAN. Our find your PAN guide shows how to look it up.

2. Apply for Instant e-PAN or on Form 93

   With Aadhaar and a linked mobile, use Instant e-PAN. Otherwise follow apply for a new PAN. If the deal can't wait and Form 97 is allowed, you can give your PAN application date and acknowledgement number on Form 97.

   If Instant e-PAN fails: it is often an Aadhaar data issue, such as no mobile number linked to Aadhaar. Update your mobile in Aadhaar, or apply on Form 93 instead.

3. Download e-PAN and use it

   An e-PAN is a digitally signed electronic PAN and is valid like the card. Give its number to the bank, registrar or seller. See download e-PAN.

   You'll know it worked when the receiver accepts the PAN and it appears on your bill or account form.

What can go wrong, and how do you fix it?

Bottom line

Check the Rule 159 table before any big deal. Make sure your PAN is operative and matches your name. Use Form 97 only where it's allowed; otherwise get Instant e-PAN first. A missing PAN means higher TDS and a possible ₹10,000 penalty. For PAN help, call Protean on 020-27218080 or e-Filing on 1800 103 0025.