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Income Tax Permanent Account Number-PAN

A. Permanent Account Number

B. Persons liable to obtain PAN

C. Application for PAN

D. Precautions while applying for a new PAN Card/Corrections

E. PAN to be quoted on all documents/correspondence

F. Payee to furnish his PAN for TDS/TCS

G. PAN to be quoted in all TDS/ TCS Statements/Returns

H. Declaration of PAN in case of Minors

I. Penalty for failure to apply for PAN

J. Surrender of Extra PAN

K. Declaration to be furnished, if not holding PAN

L. Rules regarding PAN for opening of Bank Accounts

A.        Permanent Account Number

The Income-tax Department identifies the assessees/persons with a Permanent Account Number (PAN), which is a unique 10 digit alpha-numeric number. Obtaining PAN is compulsory not only for income-tax purposes but also for certain other purposes! transactions.

PAN is to be obtained only once forever. An assessee need not obtain a new PAN, even if he is transferred to any other place.

PAN Cards : The Department is issuing multi-purpose laminated PAN Cards displaying the PA No. of the assessee.


B.        Persons Liable to obtain PAN

(A) Income-Tax Assessees

(1)        Every person whose taxable income exceeds the basic exemption limit during a Financial Year , is required to obtain PAN by making an application in prescribed form, before 31st May of the assessment year.

(2)        In case the total sales, turnover or gross receipts of the business or profession of the assessee, exceeds or is likely to exceed Rs. 5,00,000 during a Financial Year, the application for allotment of PAN should V be made before the end of the Financial Year.

(3)        In case of a charitable or religious trust liable to ifie return of income u/s 139(4A), the application for allotment of PAN should be made before the end of the accounting year.

(4)        In case of a person entitled to receive any sum/income! amount, liable to TDS, in any financial year, the application for allotment of PAN should be made before the end of such financial year.]

It is compulsory to apply for PAN, in above cases even though the tax payable is NIL. [Sec. 139A(1)]

(5)        Besides, all existing assessees who have not been allotted a Permanent Account Number under the new 10-digit alphanumeric series, are also required to apply for a Permanent Account Number under the new series to the concerned Assessing Officer.

(B) Other Tax Assessees

Following persons are also required to obtain PAN—

  1. exporters and importers, who are required to obtain an importer-exporter code;
  2. assessees under the Central Excise Act;
  3. persons issuing Cenvatable invoices under rule 57AE and registered under the Central Excise Rules, 1944;
  4. Service-tax assessees;
  5. persons registered under the Central Sales Tax Act, 1956 or the general sales tax law of the appropriate State or Union Territory. [Sec. 139A(1A)

(C) Specified Persons

The Central Government may require, by a notification, any class or classes of persons to apply for PAN within the specified time, for the purpose of collecting any information useful or relevant for income-tax purposes. [Sec. 139A(1B)]

(D) Specified Transactions

Persons intending to enter into following transactions, for which furnishing PAN is mandatory, shall also be required to obtain PAN (whether any tax is payable or not) : [Sec. 139A(2)]

  1. Sale and purchase of immovable property valued at Rs. 5 lakhs or more.
  2. Sale and purchase of motor vehicles (excluding two-wheelers).
  3. Time deposits exceeding Rs. 50,000 in a bank or banking institution.
  4. Deposits exceeding Rs. 50,000 in post office savings banks.
  5. Contract for sale or purchase of securities exceeding Rs. 1 lakh.
  6. Opening an account (not being a time-deposit) in a bank or a banking institution.
  7. Application for installation of a telephone connection including cellular telephone.
  8. Payment to hotels and restaurants exceeding Rs. 25,000 at any time.
  9. Payment in cash for purchase of bank drafts/pay orders/ bankers cheques from a bank, for an amount of Rs. 50,000 or more during any one day.
  10. Deposit in cash aggregating Rs. 50,000 or more with a bank during any one day.
  11. Payment in cash in connection with foreign travel (including A payment towards fare, or to a travel agent or a tour operator [or to an authorized person under FEMA], or for purchase of foreign currency) of an amount exceeding Rs. 25,000 at any one time.
  12. Application to bank, banking company, banking institution or to any other company o institution for issue of a credit ‘[or debit] card.
  13. Payment of Rs. 50,000 or more to a mutual fund for purchase of its units.
  14. Payment of Rs. 50,000 or more to a company for acquiring its shares.
  15. Payment of Rs. 50,000 or more to a company or an institution for acquiring their debentures/bonds.
  16. Payment of Rs. 50,000 or more to RBI for acquiring its bonds.
  17. Payment of life insurance premium of Rs. 50,000 or more in a year to an insurance company.
  18. Payment of Rs. 5,00,000 or more at any one time or against a single bill, for purchase of bullion or jewellery. [Rule 114B]
  19. All securities market transactions.
  20. Transfer of shares in physical form.
  21. Deletion of name of deceased shareholder, transmission of shares to legal heirs, change in order of names in case of physical shares.

Note :

(1) The concerned authority/person receiving any document in respect of the aforesaid transactions shall be required to furnish the copies of relevant documents to the Income-tax Department, on half-yearly basis. [Rules 114C and 114D]

(2)        The Income-tax Department launched a special drive from 20.1.2012 to 20.3.2012 for verifying high value transactions (investments/deposits! expenditure) from persons not assessed to tax or who have not furnished their PAN while entering into such transactions.’

(F) Other Persons

Any person not falling in any of the categories aforesaid may also apply for PAN. [Sec. 139A(3)]

C.        Application for PAN

A person required to apply for PAN shall furnish an application in –

  1. Form 49A — in case of individuals being citizens of India, HUFs and a company, firm (including LLP), AOP (including trust), BOl, local authority, or artificial juridical persons formed or registered in India,
  2. Form 49AA — in case of individuals not being citizens of India, and a company, firm (including LLP), AOP (including trust), BOl, local authority, artificial juridical Persons or other entity formed or registered outside India.

The application shall be made along with—

  1. in case of individual/being citizen of India:
  2. proof of identity, i.e. school leaving certificate/matriculation. Certificate / degree / depository account/credit card/ bank account/water bill/ration card/property tax assessment order/passport/voter identity card/driving licence/certificate of identity signed by a MP, MLA or Gazetted Officer, etc.
  3. proof of address i.e. electricity bill/telephone bill/depository account/credit card/bank account/ration card/ employer certificate/passport/voter identity card/ property tax assessment order/driving licence/rent receipt/certificate of address signed by MP, MLA or Gazetted Officer, etc.;

Note : -

(1) In case of minor, proofs of identity and address in respect of the parent or guardian, shall be furnished.

(2) In case of an individual resident outside India, copy of Bank Account Statement in country of residence or copy of NRE bank account statement may be furnished.]

  1. In case of a Hindu Undivided Family (HUF), an affidavit by the Karta stating the name, father’s name and address of all the coparceners on the date of application, and copy of documents as proof of identity and proof of address in resect of the karta;
  2. in case of company, copy of certificate of registration;
  3. in case of firm (including LLP), copy of certificate of registration or partnership deed;
  4. in case of trusts, copy of trust deed or certificate of registration with Charity Commissioner;
  5. in case of other AOP/BOI/Local authority/artificial juridical persons, copy of agreement or certificate of registration with Charity Commissioner/Registrar of Co-operative Societies or any other document issued by Central/State Government Department;
  6. in case of an individual not being citizen of India:
  7. proof of identity i.e. passport/PIO card/Overseas Citizenship of India card/other national or citizenship Identification Number or Taxpayer Identification Number duly attested by Apostille or Indian Embassy/High Commission/Consulate in the country of residence,
  8. proof of address i.e. any of the documents aforesaid in (a)/bank account in country of residence/NRE bank account in India/certificate of residence in India or Residential permit issued by State Police Authority/registration certificate issued by Foreigner’s Registration Office showing Indian address/visa and appointment letter or contract from Indian company and certificate of Indian address issued by employer;
  9. in case of a Firm (including LLP), company, AOP (including trust), BOl, local authority, artificial juridical person or other entity, registered outside India, copy of certificate of registration issued in the country where registered duly attested by Apostille or Indian Embassy/High Commission! Consulate in that country, or registration certificate issued in India, or approval to set up office in India.] [Rule 114]

Forms 49A and 49AA can be obtained from the offices of UTI Investor Services Ltd. or through IT PAN Service Centres, at a cost of Rs. 5 each. The forms can also be downloaded from the website www.incometaxindia.gov.in

The application should be deposited along with a fee of Rs. 94/-, payable by way of a processing coupon, (Rs. 744/- for dispatch outside India), with the IT PAN Service Centre. If an application for PAN is made through internet and payment is made through a nominated credit card, PAN is allotted on priority and communicated through e-mail.

The UTI Investor Services Ltd. office shall issue the PAN and a multi-purpose laminated PAN card within 15 days of application.

The maximum period that can be allowed for issue of PAN and PAN card, should be three months from the date of application.

Do’s and Dont’s for making Application for PAN

Do’s
1. Use ‘Form 49A’ (or 49AA) for making application for allotment of PAN.

2. Fill the application in block letters in English and with black ink.

3. Paste a recent colour photograph (size 3.5 cm x 2.5 cm).

4. Provide the signature within the box.

5. If thumb impression is put on the application form, get the thumb impression attested by Magistrate or a Notary Public or a Gazetted Officer, under official seal and stamp.

6. Attach Proof of Identity (P01) and Proof of Address (POA) as per Rule 114(4) of Income-tax Rules, 1962.

7. Provide the P01 and POA which have name exactly as written in the application.

8. Write the complete postal address in the application with landmark.

9. Mention correct pin code in the address field.

10. Mention telephone number/e-mail id in the application.

11. Provide correct A0 code in the application.

12. Specify A0 code as below if applicant is a defence employee Army - PNE W 553, Navy - MUM W 11 8 and Air Force - DEL W 722

13. Provide details of representative assessee in column 14 of application form, if applicant is minor, idiot, lunatic or deceased.

14. Provide P01 and POA for representative assessee also, if representative assessee is appointed.

Dont’s

1. Do not overwrite or make corrections in the application.

2. Do not pin or staple the photograph.

3. Do not sign across the box (i.e., signature should be within the box).

4. Do not provide P01 and POA which are not in the name of the applicant.

5. Do not write any additional details (date, designation, rank etc.) alongwith the signature in the box.

6. Do not mention husband’s name in the father’s name column

7. Do not abbreviate your name or do not use initials.

8. Do not apply for a new PAN if you already have one.

D.        Precautions while making Application for Corrections in PAN Data / a PAN Card

Where the assessee has been allotted PAN but a PAN card has not been issued to him, or if the PAN Card is lost or mutilated, or if there is any change in the particulars furnished while obtaining PAN, the assessee can apply for issue of PAN Card/correction in PAN data. The following points should be borne in mind:

1. Use form ‘Request for New PAN Card or/and Changes or Correction in PAN Data’1 for reprint of PAN card or for making changes/correction in PAN data.

2. Follow the do’s (Si. No. 2 to 10) for making application for PAN given earlier.

3. Mention correct PAN.

4. Tick the column where change is required.

5. Provide proof to support the requested change.

6. Attach proof of PAN (copy of PAN card or PAN allotment letter issued by Income-tax Department, if any) with the application.

7. Follow the dont’s for making application for PAN given earlier.

E.         PAN to be quoted on all documents/correspondence

PAN should invariably be quoted in all challans, returns, correspondence, documents pertaining to income tax. Any change in name and address of the business should be intimated to the Income Tax Officer. Those who have applied for but have not been allotted the PAN should write, “APPUED FOR”. New assessees should write in all aforesaid items “NEW ASSESSEE, PAN APPLIED FOR”. [Sec. 139A(5)]

F.         Payee to be furnished by Payee for TDS/TCS purposes

Any person receiving any sum or income on which tax is to be deducted at source, shall furnish his PAN to the person responsible for deducting TDS. [Sec. 139A(5A)]

Note : In case a deductee fails to furnish his PAN to the deductor, TDS shall be deducted @ 20% or the applicable rate, whichever is higher. [Sec. 206AA]

Besides, w.e.f. 1.4.2010, any person who desires to furnish a declaration in Form 15G or 15H for no deduction of TDS, shall also. indicate his PAN on such declaration, otherwise the declaration shall be deemed as invalid and TDS shall be deducted @ 20% or the applicable rate, whichever is higher. [Sec. 206AA]

Similarly, buyers/licencees/lessees entering into specified transactions subject to tax collection at. source (TCS), shall be required to furnish their PAN to the person responsible for collecting tax at source. [Sec. 139A (5C)]

G.        PAN to be Quoted in all TDS/TCS Statements/Returns

Any person responsible for deducting tax at source (TDS) shall be required to quote the payee’s PAN in all returns/statements and certificates relating to such TDS. [Sec. 139A(5B)]

Similarly, persons responsible for collecting tax at source (TCS) shall be required to quote the PAN of buyer, licencee or lessee in all returns/statements and certificates relating to such TCS.  [Sec. 139A(5D)]

H.        Declaration of PAN in case of Minors

In case of a minor who does not have any taxable income and who wants to open a bank account or time deposit exceeding Rs. 50,000, PAN of his father or mother or guardian may be quoted. [Rule 114B First Proviso]

I.          Penalty for Failure to Apply for PAN

Failure to apply for PAN No. or to quote the PAN in specified documents or transactions attracts penalty of Rs. 10,000. [Sec. 272Bj

J.         Surrender of Extra ‘PAN’

Any person possessing more than one PAN number should retain only one PAN and surrender all extra PAN numbers that may have been allotted to him. The extra PAN numbers may be surrendered at the Help Desk, to the Assessing Officer, on department’s website www.incometaxindia.gov.in or Aayakar Sampark Kendra at 0124-2438000.

K.        Declaration to be furnished by a Person, if not holding PAN

Persons who do not have a PAN shall be required to make a declaration in Form No. 60 while entering into any of the specified transactions. [Rule 114B Second Proviso]

Persons earning only agricultural income (and not any other taxable income), are requfred to make a declaration in Form No. 61 (in lieu of PAN).

The declarant is required to furnish proof of residence in the form of copy of ration card, passport, driving licence, identity card issued by an institution, copy of electricity bill or telephone bill, or any document or communication from a Central or State Govt. authority or local body, alongwith the declaration in Form 60 or 61.

Non-residents are also exempted from quoting PAN. They need not even furnish copy of the passport2. [Rule 114C (1)]

Central Government, State Governments and Consular Offices are also not required to quote PAN for making payments in any of the specified transactions.

L.         Rules regarding Permanent Account Number (PAN) for Opening of Bank Accounts.

1. PAN number is required to be quoted for opening an account with a bank (savings, current or any other) only in cases where person opening the account is a tax assessee and has been allotted PAN.

2. Non-Residents are not required to quote PAN. They need not even furnish a copy of their Passport.

3. In case of a minor who does not have any taxable income, PAN of his father or mother or guardian may be quoted if father! mother/guardian is an Income-tax Assessee.[Rule 114B First Proviso]

4. In case of non-assessees or those not holding PAN, a declaration in Form No. 60 or 61 (photocopy also acceptable), as the case may be, can be furnished.

5. In case forms 60 or 61 are not available for any reason, a declaration made on plain paper is also acceptable.

6. Banks should not refuse opening an account for non-availability of PAN if declaration as mentioned above is furnished.
 

 

 
 
 
 
 
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