Alert! 5 new PAN card rules to come into effect from Dec 5; All you need to know
In a bid to avert tax evasion cases, the Income Tax (IT) department has made some alterations in Permanent Account Number (PAN) card rules taking effect from December 5, 2018.
This is a new amendment in Income Tax Rules, 1962. “In the 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 9CBDT) made the following rules to amend the Income-tax Rules, 1962,” the CBDT notification said.
Here are 5 things to know about the new PAN card rules:
1. The CBDT has made it mandatory for a person, being a resident, other than an individual, who makes the financial transaction of two lakh fifty thousand rupees or more in one financial year to apply for 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. Under the new rule, it is mandatory for all resident entities to obtain PAN card even if the total sales or turnover or gross receipts have not or are not likely to exceed Rs 5 lakh in a financial year. "This will help the income tax department track financial transactions, broaden its tax base and prevent tax evasion," Suraj Nangia, Partner, Nangia Advisors LLP told news agency PTI.
3. The new notification also stated that 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 or any person competent to act on behalf of the person and who has not been allotted any permanent account number, should also apply for a PAN card on or before May 31, 2019.
4. Individual taxpayers, who are not associated with such entities, need not worry about the new income tax notification.
5. Quoting of father's name in PAN application forms will not be mandatory in cases where the mother of the applicant is a single parent. Even if a PAN applicant’s father is deceased or separated, the applicant can prefer not to mention his/ her father’s name at all in the form.
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