Direct & Indirect Taxes, Tax Ready Reckoner, Tax Management, Tax Act. & Rules, Tax Planning & Tax Savings.

Direct & Indirect Taxes, Tax Ready Reckoner, Tax Management, Tax Act. & Rules, Tax Planning & Tax Savings.

Permanent Account Number (PAN) [Section 139A and Rule 114]

Permanent Account Number (PAN) [Section 139A and Rule 114]
Permanent Account Number (PAN) [Section 139A and Rule 114]

1.   [Section 139A (1)]- Who has to apply for PAN?:

Every person who has not been allotted a permanent account number shall, within such time, as may be prescribed, apply to the Assessing Officer for the allotment of a permanent account number in the following cases if:

(i)         his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to income-tax; or

(ii)        he is carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed Rs. 5,00,000 in any previous year; or

(iii)       he is required to furnish a return of income under section 139(4A), i.e., return of trust and charitable institutions; or

(iv)       Not relevant now.

(v)        the person being a resident, other than an individual, which enters into a financial transaction of an amount aggregating to Rs. 2,50,000 or more in a financial year; or

(vi)       the person is the managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of the person referred to in clause(v) or any person competent to act on behalf of the person referred to in clause (v) or.

(vii)      the person intends to enter into such transaction as may be prescribed by the Board in the interest of revenue. [Inserted by the Finance (No. 2) Act, 2019, w.e.f. 1.9.2019]

2.   [Section 139A(1A)]- Power delegated to the central Government to notify class or classes of persons for whom it will be obligatory to apply for permanent account number (PAN).

With a view to progressively making PAN a common business identification number for other departments such as the Central Board of Excise and Customs and the Director General of Foreign Trade, the Act has delegated the power to the Central Government to notify class or classes of persons for whom it will be obligatory to apply for PAN, provided tax is payable by them under the Income- tax Act or any tax or duty is payable by them under any other law in force including importers and exporters whether any tax is payable by them or not.

The Central Government by Notification No. 11468, dated 29.8.2000 has notified the following class or classes of persons who shall apply to the Assessing Officer for allotment of permanent account number:—

(i)         Exporters and Importers as defined in section 2(20) and section 2(26) of the Customs Act, 1962, who are required to obtain an importer-exporter code under section 7 of the Foreign Trade (Development and Regulations) Act. 1992.

(ii)        Assessees as defined in rule 2(3) of Central Excise Rules, 1944. (it is now merged under GST Law)

(iii)       Persons who issue invoices of Cen vat i.e. traders, etc. requiring registration under Central Excise Rules, 1944. (it is now merged under GST Law)

(iv)       Persons who are assessees under service tax. (it is now merged under GST Law)

See also  Penal Provisions in case of TCS

The above persons shall apply for allotment of PAN within 15 days of the date of publication of the notification in the Official Gazette.

However, persons who may fall in the above category, after the date of the above notification, shall apply for allotment of PAN:—

(a)              in case of (i) above, before making an import or export;

(b)        in case of (ii) and (iii) above, before making an application for registration under central excise;

(c)        in case of (iv) above, before making an application for registration under service tax.

The Central Government, by Notification No. 355/2001. dated 11.12.2001 has further notified the following class or classes of persons:

1.  Persons registered under the Central Sales Tax Act, 1956 or the general sales tax law of the appropriate State or Union Territory, as the case may be.

2.  As on the date of this notification, a person falling within a class or classes of persons referred to in paragraph I. shall apply for the allotment of permanent account number within thirty days of the date of publication of this notification in the Official Gazette.

3.  A person who may fall within such class or classes of persons after the date of this notification, as is referred to in paragraph (I), shall apply for the allotment of permanent account number (PAN) before making any application for registration under the Central Sales Tax Act, 1956 or the general sales tax law of the appropriate State or Union territory, as the case may be.

3. [Section 139A(1B)]- Prescribing new class of persons for allotment of PAN and Suo-moto allotment of PAN:

The Central Government may, for the purpose of collecting any information which may be useful for or relevant to the purposes of this Act, by way of notification specify any class or classes of persons, and such persons shall within the prescribed time apply to the Assessing Officer for allotment of a permanent account number.

4. [Section 139A (2)]- PAN may be allotted by the Assessing Officer (AO):

The Assessing Officer having regard to the nature of transactions as may be prescribed may also allot a permanent account number to any other person (whether any tax is payable by him or not) in the manner and in accordance with the procedure as may be prescribed.

5.   [Section 139A (3)]- Person other than falling under section 139A (1) or (2) may apply for PAN:

Any person, not falling under section l39A(l) or section 139A(2) above, may apply to the
Assessing Officer for the allotment of a permanent account number and, thereupon, the
Assessing Officer shall allot a permanent account number to such person forthwith.

6.   [Section 139A(5)]- PAN to be quoted in certain cases:

On allotment of permanent account number, every person shall:

(a)        quote such number in all his returns to, or correspondence with, any income-tax authority;

(b)        quote such number in all challans for the payment of any sum due under this Act;

(c)        quote such number in all documents pertaining to such transactions as may be prescribed by the Board in the interests of the revenue, and entered into by him.

(1) [Section 139A(5A)]- Obligation of a person receiving any sum / income / amount from which tax has been deducted at source:

Every person receiving any sum or income or amount from which tax has been deducted under the provisions of Chapter XVIIB. shall intimate his permanent account number to the person responsible for deducting such tax under that Chapter.

(2)   [Section 139A(5B)]- Obligation of a person who has Deducted the Tax at Source:

Where any sum or income or amount has been paid after deducting tax, every such person deducting tax shall quote the PAN of the person to whom sum/income/amount has been paid by him in:

(a)        the statement of perquisites furnished to the employee in accordance with the newly inserted section 192(2C);

(b)        all certificates of TDS furnished under section 203;

(c)        in all statements prepared and delivered or caused to be delivered in accordance with the provisions of section 200(3).

However, the Central Government may notify different dates from which the provisions of this sub-section shall apply in respect of any class or classes of persons.

(3)   [Section 139A(5C)]- Obligation of a Buyer, Licensee, Lessee referred to in section 206C:

Every such buyer, licensee or lessee shall intimate his PAN to the seller of such goods.

See also  [Section 269SS]- Mode of taking or accepting certain Loans, Deposits and Specified Sum

(4)   [Section 139A(5D)]- Obligation of the person responsible for collecting Tax:

Every person responsible for collecting tax under section 206C shall quote the PAN of every buyer, licensee or lessee: —

(i)         in all certificates furnished to the buyer/licensee/lessee under section 206C;

(ii)        in all statements prepared and delivered or caused to be delivered in accordance with the provisions of section 206C (3).

7.   [Section 139A (6)]- Duty of the Person receiving any document relating to the transactions where quoting of PAN is compulsory

Every person receiving any document relating to a transaction prescribed under clause (c) of subsection (5) shall ensure that the permanent account number or the General Index Register Number or the Aadhaar number, as the case may be has been duly quoted in the document.

8.   [Section 139A(6A)]- Quoting and Authentication of PAN in the Documents pertaining to prescribed Transactions:

Every person entering into such transaction, as may be shall quote his permanent account number or Aadhaar number, as the case may be, in the documents pertaining to such transactions and also authenticate such permanent account number or Aadhaar number, in such manner as may be prescribed.

9.   [Section 139A(6B)]- Person receiving the document pertaining to prescribed transactions to ensure PAN or Aadhaar number has been duly quoted and authenticated:

Every person receiving any document relating to the transactions referred to in section 139A(6A), shall ensure that permanent account number or Aadhaar number, as the case may be, has been duly quoted in such document and also ensure that such permanent account number or Aadhaar number is so authenticated.

10. Transactions where Quoting of PAN made Compulsory [Section 139A (5) (c) and Rule 114B]

Every person shall quote his PAN (Permanent Account Number) in all documents pertaining to the transactions specified in the Table below, namely :-

TABLE

SL No. Nature of transaction Value of transaction
(1) (2) (3)
1. Sale or purchase of a motor vehicle or vehicle, as defined in section 2(28) of the Motor Vehicles Act, 1988 which requires registration by a registering authority under Chapter IV of that Act, other than two wheeled vehicles. All such transactions
2. Opening an account [other than a time-deposit referred to at Sl. No.12 and a Basic Savings Bank Deposit Account] with a banking company or a cooperative bank to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act). All such transactions.
3. Making an application to any banking company or a co- operative bank to which the Banking Regulation Act, 1949, applies (including any Bank or banking Institution referred to in section 51 of that Act) or to any other company or institution, for issue of a credit or debit card. All such transactions.
4. Opening of a Demat Account with a depository, participant, custodian of securities or any other person registered under section 12(1A) of the Securities and Exchange Board of India Act, 1992. All such transactions.
5. Payment to a hotel or restaurant against a bill or bills at any one time. Payment in cash of an amount exceeding Rs. 50,000
6. Payment in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time. Payment in cash of an amount exceeding Rs. 50,000
7. Payment to a Mutual Fund for purchase of its units. Amount exceeding Rs. 50,000.
8. Payment to a company or an institution for acquiring debentures or bonds issued by it Amount exceeding Rs. 50,000.
9. Payment to the Reserve Bank of India. constituted under section 3 of The Reserve Bank of India Act. 1934 for acquiring bonds issued by it. Amount exceeding Rs. 50,000.
10. Deposit with, —

(i)   a banking company or a co-operative bank to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act);

(ii)  Post Office.

Cash deposits, —

(i)  exceeding Rs. 50,000. during any one day; or

(ii) aggregating to more than Rs. 2,50,000 during the period 9th November, 2016 to 30th December, 2016.

11. Purchase of bank drafts or pay orders or banker’s cheques from a banking company or a co-operative bank to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act). Payment in cash for an amount exceeding Rs. 50,000 during any one day.
12. A time deposit with, —

(i)   a banking company or a co-operative bank to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act);

(ii)   a Post Office;

(iii)   © Nidhi referred to in section 406 of the Companies Act, 2013; or

(iv)   a non-banking financial company which holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934, to hold or accept deposit from public.

Amount exceeding Rs. 50,000 or aggregating to more than Rs. 5,00,000 during a financial year.
13. Payment for one or more pre-paid payment instruments, as defined in the policy guidelines for issuance and operation of pre-paid payment instruments issued by Reserve Bank of India under section 18 of the Payment and Settlement Systems Act, 2007, to a banking company or a co-operative bank to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act) or to any other company or institution. Payment in cash or by way of a bank draft or pay order or banker’s cheque of an amount aggregating to more than Rs. 50,000 in a financial year.
14. Payment as life insurance premium to an insurer as defined in section 2(9) of the Insurance Act, 1938. Amount aggregating to more than Rs. 50,000 in a financial year.
15. A contract for sale or purchase of securities (other than shares) as defined in section 2(h) of the Securities Contracts (Regulation) Act, 1956. Amount exceeding Rs. 1,00,000 per transaction.
16. Sale or purchase, by any person, of shares of a company not listed in a recognised stock exchange. Amount exceeding Rs. 1,00,000 per transaction.
17. Sale or purchase of any immovable property. Amount exceeding Rs. 10,00,000 or valued by stamp valuation authority referred to in section 50C of the Act at an amount exceeding ten lakh rupees.
I 8 Sale or purchase, by any person, of goods or services of any nature other than those specified at SI. No. 1 to 17 of this Table, if any. Amount exceeding Rs. 2,00,000  per transaction:

Explanation.—For the purposes of this Rule,—

(1)        “payment in connection with travel” includes payment towards fare, or to a travel agent or a tour operator, or to an authorised person as defined in clause (c) of section 2 of the Foreign Exchange Management Act, 1999;

(2)        “travel agent or tour operator” includes a person who makes arrangements for air, surface or maritime travel or provides services relating to accommodation, tours, entertainment, passport, visa, foreign exchange, travel related insurance or other travel related services either severally or in package;

(3)          “time deposit” means any deposit which is repayable on the expiry of a fixed period.

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