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Permanent Account Number (PAN) [Section 139A]

  1. What is PAN (Permanent Account Number)

  2. Mandatory Requirement to obtain PAN

  3. Who has to apply for PAN ? [Section 139A(1)]

  4. Application for Allotment of Permanent Account Number (PAN) [Rule 114(1) & (2)]

  5. Time Limit for Submitting Application for allotment of PAN [Rule 114(3)]

  6. PAN to be quoted in certain cases [Section 139A(5)]

  7. Aadhaar Number to be intimated [Rule 114(5)] by every person who has been alloted PAN :

1. What is PAN (Permanent Account Number)

The provisions of Section 139A of the Income Tax Act, to be read with Rule 114 of the Income Tax Rules deal with the requirement of application and obtaining of Permanent Account Number.

PAN is a 10 digit code allotted to each essessee by I.T. Dept.

Quoting of the Permanent Account Number (PAN) has been made mandatory by the I.T. Department in many instances. An assessee needs to mention his PAN in his return.

A person has to apply in Form 49A to the Assessing Office having jurisdiction to assess the applicant. In order to improve PAN related services, the Dept. has authorized UTI Investor Services Ltd.( UTISIL) to manage IT PAN Services Centers in all cities or towns where there is an Income Tax Office, and National Securities Depository Limited (NSDL) to dispense PAN services.

The main advantages of having a PAN include, convenience to locate the Assessing Officer, Faster Assessment , Processing of Refunds, ensuring Tax Compliance, Credit for Payment of Taxes, and Control over unregulated and Undisclosed Transactions.

The application form should be filled in carefully and completely giving specified information, including name of the assessee, father’s name , address, date of birth, sources of income, etc.

Permanent Account Number (PAN) [Section 139A]

2. Mandatory Requirement to obtain PAN

The following persons are required to obtain a PAN –

  • If income Exceeds Exemption Limit or Turnover Exceeds Rs. 5,00,000 (Rs. 5 Lakh) –

  • Application should be submitted to obtain PAN before May 31 of the assessment year for which the income exceeds the maximum amount chargeable to tax or before the end of the accounting year for which the gross turnover or receipts exceed Rs. 5,00,000.

  • Charitable Trust –

  • A person who is required to furnish return of income under section 139(4A) (i.e., charitable trust) is required to obtain PAN.

  • Financial transaction in aggregate of Rs. 2,50,000 or more –

  • Any resident person (not being an individual) who enters into a financial transaction of an amount aggregating to Rs. 2,50,000 or more during a financial year (as well as managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of such person or any person competent to act on behalf of such person) is required to obtain PAN with effect from April 1, 2018.

  • Person specified by the Central Government –

  • The Central Government has power to notify (for collection of any information) any person to apply for PAN. For this purpose, the following persons have been notified by the Central Government and these persons shall apply to the Assessing Officer for PAN – exporters/importers, assessees under central excise/service tax/sales tax.

  • Allotment by Assessing Officer of his own –

    Besides above cases, the Assessing Officer may also allot a PAN to any other person by whom tax is payable. Any other person may also apply for a PAN.

3. Who has to apply for PAN ? [Section 139A(1)]

Every person who has not been allotted a permanent account number shall, within such time, as may be prescribed, apply to the Assessing Officer for the allotment of a permanent account number in the following cases:

  1. if his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to income-tax; or

  2. if he is carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed Rs. 5,00,000 in any previous year; or

  3. he is required to furnish a return of income under section 139(4A), i.e., return of trust and charitable institutions.

4. Application for Allotment of Permanent Account Number (PAN) [Rule 114(1) & (2)]

  1. Form for application [Rule 114(1)]:

  2. An application under section 139A(1) or section 139A(1A) or section 139A(2) or section 139A(3) for allotment of a permanent account number shall be made in Form No. 49A or 49AA, as the case may be.

    Provided that an applicant may apply for allotment of permanent account number through a common application form notified by the Central Government in the Official Gazette, and the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) shall specify the classes of persons, forms and formats along with procedure for safe and secure transmission of such forms and formats in relation to furnishing of permanent account number.

  3. To whom the application is to be made [Rule 114(2)]:

  4. An application referred to in rule 114(1) shall be made,—

    1. in case where the function of allotment of permanent account number under section 139A has been assigned by the Chief Commissioner or Commissioner to any particular Assessing Officer, to that Assessing Officer;

    2. in any other case, to the Assessing Officer having jurisdiction to assess the applicant.

5. Time Limit for Submitting Application for allotment of PAN [Rule 114(3)]

Situation Time limit for a making application
1. If his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum atnount which is not chargeable to income-tax. on or before 31st May of the assessment year in which such income is assessable
2. If he is carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed 5,00,000 in any financial year. on or before the end of that financial year
3. If he is required to furnish a return of income under section 139(4A). i.e. return of trust and charitable institutions, on or before the end of the relevant financial year
4. In the case of a person who is entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB (relating to TDS) in any financial year. on or before the end of such financial year
5. If he is a person who is not required to apply for PAN under any of the above clauses application can be made at any time

6. PAN to be quoted in certain cases [Section 139A(5)]

On allotment of permanent account number, every person shall:

  1. quote such number in all his returns to, or correspondence with, any income-tax authority;

  2. quote such number in all challans for the payment of any sum due under this Act;

  3. quote such number in all documents pertaining to such transactions as may be prescribed by the Board in the interests of the revenue, and entered into by him.

Every person shall intimate the Assessing Officer any change in his address or in the name and nature of his business on the basis of which the permanent account number was allotted to him. [Section 139A(5)(d)]

7. Aadhaar Number to be intimated [Rule 114(5)] by every person who has been alloted PAN :

Every person who has been allotted permanent account number as on the 1st day of July, 2017 and who in accordance with the provisions of subsection (2) of section 139AA is required to intimate his Aadhaar number, shall intimate his Aadhaar number to the Principal Director General of Income-tax (Systems) or Director-General of Income-tax (Systems) or the person authorised by the said authorities.

PDGIT or DGIT (Systems) to specify the formats and standards alongwith procedure, for the verification of documents [Rule 114(6)]:

The Principal Director General of Income-tax (Systems) or Director-General of Income-tax (Systems) shall specify the formats and standards alongwith procedure, for the verification of documents filed with the application under sub-rule (4) or intimation of Aadhaar number in sub-rule (5), for ensuring secure capture and transmission of data in such format and standards and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing of the application forms for allotment of permanent account number and intimation of Aadhaar number.

CONTENT : Permanent Account Number (PAN) [Section 139A] and Aadhaar Number (Section 139AA)

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