Every income tax payer has to receive Permanent Account Number from Income Tax Department. Permanent Account Number contains ten digit alpha-numerical numbers.
Q. What is Permanent Account Number (PAN)?
Ans. Income Tax Department identifies the tax payees with a Permanent Account Number (PAN), which is unique 10 digit alpha-numeric number. PAN is to obtained only once for ever.
Q. What is PAN card?
Ans. After the duly filled application for permanent account number is received by the income tax department from the individual/partnership firm/company/trust etc, the income tax department issues a laminated card which shows the 10 digit PAN number, date of birth, father’s name, the photograph of the applicant and the signature of the applicant.
However, for applicants other than individuals like company, partnership firm, society, charitable trust etc. the photo and father’s name is not shown on PAN card. In place of date of birth, the date of incorporation of the applicant is shown. The PAN card is duly signed by the authorized person of income tax department.
Q. Who is liable to obtain PAN?
Ans. Following persons are liable to obtain PAN:-
- Any person whose taxable income exceeds the basic exemption limit during a financial year. The application for PAN number must be submitted before the end of relevant financial year.
- If the Gross sales or gross receipts of any person exceeds or likely to exceed Rs.500000/= during a financial year then to obtain PAN is compulsory for such person.
- All religious and charitable trusts must obtain PAN irrespective of income whether taxable or no.
- The person whose income or receipts are subject to TDS, he should obtain PAN whether the income is taxable or no.
- All Exporters and Importers must obtain PAN.
- All assessees covered under Central Excise Act.
- All Service Tax assessees.
- All persons registered under Central Sales Tax Act or Local Sales Tax.
- The Central Government may issue a notification to have PAN number of any class of person to collect some useful information relating to any relevant financial year.
Q. What are the specified transaction for which furnishing PAN is mandatory?
Ans. Following are the transactions against which furnishing PAN is mandatory:-
- Sale and purchase of immovable property valued at Rupees 10 lakhs or more.
- Sale and purchase of motor vehicles (excluding two wheelers).
- Time deposits exceeding Rs.50,000/= with a Bank or banking institutions.
- Deposits exceeding Rs.50,000/= in post office saving banks.
- Contact for sale or purchase of securities exceeding Rs.1 lakh.
- Opening an account (not-being a time-deposit) in a bank or banking institutions.
- Application for new telephone connection including cellular phone.
- Any payment made to hotels exceeding Rs.25,000/= at any time.
- Payment for purchase a draft/pay order for Rs.50,000/= or more during any one day.
- Cash deposit in to a bank for Rs.50,000/= or more during any one day.
- Purchase of foreign currency exceeding Rs.25,000/= at any one time.
- Payment in cash to any one in respect of foreign travel exceeding RS.25,000/= at any one time.
- To apply for Credit Cards or Debit Cards.
- Payment of Rs.50,000/= or more to a mutual fund for purchasing mutual fund units
- Payment of Rs.50,000/= to a company for acquiring the shares of the company
- Payment of Rs.50,000/= to a company or an institution for acquiring its bonds or debenture.
- Payment of Rs.50,000/= or more to Reserve Bank of India for acquiring its bonds.
- Payment of Rs.50,000/= or more for life insurance premium to an insurance company in a year.
- Payment of Rs.5,00,000/= or more for purchase of bullion or jewellery.
- Transfer of shares in physical form.
- Any other person not falling in any of the categories aforesaid may also apply for PAN.
DECLARATION IF NOT HAVING PERMANENT ACCOUNT NUMBER (PAN)
- Any person who does not have PAN number, shall be required to make declaration in Form No.60 while making any specified transaction.
- A person who is having only agricultural income (not any other taxable income), will be required to submit declaration in Form No. 61.
- The declarant is furnished the proof of residence like copy of voter’s ID card, or driving license or ration card or passport or copy of electricity bill or copy of telephone bill or any document or communication from Central Government or State Government or Local Authority along with form 60 or 61.
- Non-residents are exempted from quoting PAN. They even need not to furnish the copy of pass port.
- Central Government, State Government and Consular Offices are not required PAN number for making any specified transactions.
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