Recently, many taxpayers have received a text message from the Income Tax Department. This message states that the department has noticed specific transactions reported in Form 60/61 for the financial year 2021-22. If the recipient of the message doesn't have a Permanent Account Number (PAN), they are required to apply for one using Form 49A. Alternatively, they must provide their PAN number to the Reporting Entity within 15 days from the campaign execution date. This message has been confirmed as genuine by the Income Tax Department's official Twitter account.
What is Form 60?
Form 60 is a document that a person uses when they don't have a PAN. PAN (Permanent Account Number) is usually required for various financial transactions. But if someone doesn't have a PAN, they can use Form 60 instead.
Why are people receiving this SMS?
People are receiving this SMS because they engaged in certain transactions that require the use of a PAN. However, if they didn't have a PAN and used Form 60 instead, the Income Tax Department needs them to either apply for a PAN or provide their PAN details to the Reporting Entity.
These "specified transactions" refer to financial activities where using a PAN is mandatory. According to Rule 114B, individuals without a PAN must provide a declaration in Form 60 to the relevant Reporting Entity. This applies to transactions like buying or selling property, vehicles, or shares not listed on recognized stock exchanges.
For instance, if someone bought a car and used Form 60 instead of PAN, they might get this SMS. Another situation is buying gold worth over Rs 2 lakh and using Form 60 instead of PAN.
How to Respond to the SMS?
If you've received the SMS, there could be two reasons: you used Form 60 for specified transactions, or someone fraudulently used your details in Form 60. If you already have a PAN, provide it to the entity with whom you did the transaction within 15 days from the transaction date.
Taking this SMS seriously is important, especially if you didn't use Form 60 but still received it. This could indicate identity fraud. If you suspect fraud, email cmcpc_support@insight.gov.in or call 1800 103 4215 to report it to the Income Tax Department.
Who are Reporting Entities (RE)?
Reporting Entities are organizations/people that must record an individual's PAN for specific financial transactions. Banks, post offices, and property/vehicle registrars are examples. The Central Board of Direct Taxes (CBDT) defines them in section 285BA. For instance, when dealing with foreign exchange, the reporting entity is the authorized dealer or money changer.
In simple terms, the SMS alerts people about transactions that require PAN usage. If you don't have a PAN, you can use Form 60, but make sure to follow the Income Tax Department's instructions carefully to avoid issues.
The author is a Chartered Accountant with 2 decades of experience into Accounting, Taxation, Auditing, Risk & Compliance, Credit Controls, Due diligence. Currently, the author is the founder and managing partner at RRL Global Services. She can also be reached at rrlglobal@yahoo.com
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