Here are 5 things to know about the new PAN card rules which will come into effect on December 5.
The Central Board of Direct Taxes (CBDT) has amended the income tax rules making it mandatory for entities doing business worth over Rs 2.5 lakh in a financial year to have a Permanent Account Number or PAN. The move, aimed at preventing tax evasion, will come into effect on December 5.
According to a notification issued by the CBDT last week, all entities which made financial transactions of at least Rs 2.5 lakh in a financial year must apply for a PAN card till May 31 of the coming financial year.
“In exercise of the powers conferred by section 139A read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962,” the CBDT notification said.
Here are 5 things to know about the new PAN card rules:
1- According to CBDT, it is now mandatory for entities that have made financial transactions worth Rs 2.5 lakh or more in a financial year to apply for a PAN card. The application has to be filed on or before May 31 of the assessment year for which such income is assessable, the central tax body said.
2- The amended Income Tax Rules, 1962, says: In the case of a person, being a resident, other than an individual, which enters into a financial transaction of an amount aggregating to two lakh fifty thousand rupees or more in a financial year and which has not been allotted any permanent account number, on or before the 31st day of May immediately following such financial year.
3- The resident entities shall have to obtain PAN even if the total sales/ turnover/ gross receipts are not or are not likely to exceed Rs 5 lakh in a financial year.
4- In the case of a person, who is the managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of the person, or any person competent to act on behalf of the person referred, who does not have a permanent account number, on or before the 31st May, must immediately apply for a PAN Card following the financial year in which the person referred enters into financial transaction.
5- Under the amended rules, quoting of father's name in PAN application forms will not be mandatory in cases where mother of the applicant is a single parent. The application forms would give an option to the applicant as to whether mother is a single parent and the applicant wishes to furnish the name of mother only. Currently, furnishing father’s name is mandatory for the allotment of PAN.
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