PAN card: These entities must apply for PAN before May 31 under new rules

Non-individual who do not hold a Permanent Account Number (PAN) card and have conducted financial transactions of over Rs. 2.5 lakh in the last fiscal, will have to apply for PAN before May 31. Even those managing financial transactions for non-individual entities will have to get PAN before the deadline. Not complying this before the deadline can attract a penalty, as per the Economic Times report.

As per section 139A, every person other than an individual, i.e., a company, trust, LLP, HUF etc. who is a resident of India as per the laws and who has entered into financial transaction of Rs 2.5 lakh or more in a financial year is required to apply a PAN before May 31 of the relevant assessment year. The amendment to section 139A was made by the Finance Act 2018. The CBDT vide notification dated December 5, 2018, notified the aforesaid date of May 31. Thus, any person as specified above who has entered into a financial transaction of Rs 2.5 lakh or more during FY 2018-19 has to apply for a PAN card by May 31, 2019, said an ET report.

The CBDT notified on November 18 last year that non-individual entities which have conducted one or more transactions of over Rs 2.5 lakh each in a fiscal year are mandatorily required to apply for PAN before May 31, 2019, in case they do not possess the card.

If the non-individual entities do not apply for a PAN on or before May 31, 2019, then a penalty can be imposed on them for non-compliance. The penalty of Rs 10000 can be imposed under section 272B (1) of the Income Tax Act.

A person who has a PAN card can only undertake fewer transactions which are listed in Rule 114B of the Income-tax Rules, 1962. Rule 114B covers transactions such as sale or purchase of a motor vehicle, opening an account with the bank other than an FD, the opening of a DEMAT account, purchase of mutual funds, sale or purchase of immovable property, etc.