PROVISIONS REGARDING PAN (PERMANENT ACCOUNT NUMBER) IN
- The Permanent Account Number is allotted by the Income Tax Department. No person can have more than one PAN.
- PAN is required for following transactions.
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for filing Income Tax returns etc.,
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sale or purchase of any immovable property valued at five lakh rupees or more,
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sale or purchase of a motor vehicle,
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a time deposit, exceeding fifty thousand rupees, with a bank,
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a deposit, exceeding fifty thousand rupees, in any account with Post Office,
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a contract of a value exceeding one lakh rupees for sale or purchase of securities,
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opening a bank account or a demat account,
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making an application for installation of a telephone connection (including a cellular telephone connection),
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payment in cash for purchase of bank drafts or pay orders or banker’s cheques for an amount aggregating fifty thousand rupees or more during any one day,
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deposit in cash aggregating fifty thousand rupees or more with a bank during any one day,
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payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time,
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payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time,
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where professional fee/other payment is to be received after deduction of TDS, otherwise TDS rate or 20% whichever is higher shall be applicable
- The following persons need to obtain PAN compulsorily:
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If one’s total income during any financial year exceeds the basic exemption limit under Income Tax Act or the total sales or gross receipt of business are likely to exceeded Rs. 5 lacs in any previous year and persons intending to make any transaction given in point no.2.
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PAN enables the Income Tax Department to link all transactions of the “person” with the department. These transactions include tax payments, TDS/TCS credits, returns of income/wealth/gift/FBT, specified transactions, correspondence, and so on. PAN, thus, acts as an identifier for the “person” with the tax department.
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If a person fails to comply with the requirements relating to PAN, he may be liable to penalty of Rs.10, 000/- for each failure or default.
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And last but not the least, The Assessing Officer may allot PAN to any person on his own also.
Brijesh Baranwal
Practicing Chartered Accountant
Note:
1. The above write up is only for awareness purpose and should not be considered as expert opinion.
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