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.
- for filing Income Tax returns etc.,
- sale or purchase of any immovable property valued at five lakh rupees or more,
- sale or purchase of a motor vehicle,
- a time deposit, exceeding fifty thousand rupees, with a bank,
- a deposit, exceeding fifty thousand rupees, in any account with Post Office,
- a contract of a value exceeding one lakh rupees for sale or purchase of securities,
- opening a bank account or a demat account,
- making an application for installation of a telephone connection (including a cellular telephone connection),
- 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,
- deposit in cash aggregating fifty thousand rupees or more with a bank during any one day,
- payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time,
- payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time,
- 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:
- 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.
- 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.
- 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.
- And last but not the least, The Assessing Officer may allot PAN to any person on his own also.
Practicing Chartered Accountant
1. The above write up is only for awareness purpose and should not be considered as expert opinion.
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