02 August 2009

Applying for Income-tax Permanent Account Number

Applying for Income-tax Permanent Account Number

Permanent Account Number; PAN as it is know, is 10 digit alpha-numerical number allotted by income tax department to all tax payers.

Who must apply for PAN?

Having a PAN is necessary every person who has to file income-tax return. Every person whose total income or the total income of any other person in respect of which he is assessable under this I T Act during any previous year exceeded the maximum amount which is not chargeable to income tax must apply for PAN.Also any person carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed five lakh rupees in any previous year must apply for PAN.

It is also necessary to quote PAN in all documents pertaining to financial transaction notified by CBDT.

Accordingly, every person shall quote his PAN in all documents pertaining to the transactions specified below, namely :-
(a) Sale or purchase of any immovable property valued at five lakh rupees or more;
(b) Sale or purchase of a motor vehicle or vehicle which requires registration by a registering authority, except sale or purchase of two wheeled vehicles or any detachable side-car having an extra wheel, attached to the motor vehicle;
(c) A time deposit, exceeding fifty thousand rupees, with a bank;
(d) A deposit, exceeding fifty thousand rupees, in any account with Post Office Savings Bank;
(e) A contract of a value exceeding ten lakh rupees for sale or purchase of securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);
(f) Opening an account not being a time-deposit referred to in clause (c) with a bank;

(g) Making an application for installation of a telephone connection (including a cellular telephone connection);
(h) Payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time :
i) Where a person, making an application for opening an account in the bank is a minor and who does not have any income chargeable to income-tax, he shall quote the PAN of his father or mother or guardian, as the case may be, in the document.
Before filing income-tax return all assesses should apply for PAN. On application for PAN the applicant gets a letter form the ITD along with a laminate PAN card.

PAN is also required to be quoted under various other laws like SEBI Act, etc. PAN is to be quoted when opening Demat account. It is necessary to quote PAN on application for registration under Sales-tax laws, Central Excise laws, Service tax laws, applying for Import-Export Code, etc. It is also required to be quoted for acquiring credit cards, etc.

PAN card is accepted as valid proof by various departments like Railways and Maharashtra Road Transport for availing concession in ticket.

New section 206AA introduced by Finance Act (No.2), 2009 states every person who receives income or any sum on which TDS (withholding tax) is to be deductible (the deductee) must provide valid PAN to the deductee (person liable to deduct withholding tax). Where the deductee fails to provide valid PAN to deductor, then the deductor should deduct tax at maximum of i) rates in force or rates provided in specific section applicable to the nature or payment and ii) at the rate twenty percent on the applicable amount which ever is higher.

How to apply for a PAN?

PAN application should be made only on Form 49A. Application in case of individuals must be accompanied by two photographs of size 3.5 inches X 2.5 inches.

The assessee has to also give proof of age and address along with the application.Proof of address can be copy of any one of the documents, ration card, bank statement, electric bill in the name of applicant, driving licence, passport, or certificate of address signed by a MP or an MLA or a Municipal Councilor or a Gazetted Officer.Proof of age includes birth certificate, school leaving certificate, matriculation certificate, voter's identity card, driving licence, passport. In case the PAN applicant is a minor, any of above documents of any of the parents or guardian of such minor shall serve as proof of Identity.In case PAN application is made on behalf of a HUF, any of above documents in respect of Karta of the HUF will serve as proof of Identity.

All the documents must be in English or Hindi. Fees of about Rs.85/- +Service tax is to be paid with the application. The work of allotment of PAN is outsourced to UTI and NSDL. The application is to be made at counter of UTI or NSDL. On receipt of application, UTI/NSDL will verify the application and if application is found in order, it shall issue PAN card within days. Application can be made online, but the form is again required to be submitted to UTI/NSDL along with proof of age and address.

Female applicants, irrespective of marital status, have to give father's name in the PAN application. The form must be filled in black and must also be signed in black ink.

In cases were a person cannot sign, Left Hand Thumb impression of the applicant must be affixed on Application Form at the place meant for signatures and it must be attested by a Magistrate or a Notary Public or a Gazetted Officer, under official seal and stamp.

In case of non-resident, a minor, lunatic, idiot, and court of wards and such other persons, he may be represented through a Representative Assessee. In such cases, application for PAN can be made by the Representative Assessee. Representative Assessee must fill-in all details of the person on whose behalf he is making application and also give his name and address in column 14 of PAN application form.

In case PAN card is lost an application can be made for new PAN card.

In case on change in name due to marriage of a female applicant, change in name of company or in any other case, application must be accompanied by necessary proof like marriage certificate.

It must be noted that it is not necessary to file income tax return every year if someone is having a PAN. Individual tax payers may file return only for the year in which they have taxable income or have any unabsorbed loss which they want to carry forward to next year.

Form 49AE

PAN Number details:

PAN Number is 10 digit alpha-numerical number, in format AAAAA9999A. The first three character is for location of PAN holder. Fourth digit give details of status of PAN holder, i.e P for Individual, H for Hindu Undivided Family, C for Company, T for Trust, etc. Fifth digit is from the first character of name. Last digit is a check digit. PAN no is valid even after change in address from one city to another or from one state to another

PAN Card.

PAN Card is a laminated card issued by income tax department along with letter of allotment of PAN. Pan card contains PAN, Full Name of the applicant, Date of Birth in case of individuals, Date of incorporation or company formation in case of companies, firms, trusts, societies, etc; Father's full name in case of individuals even in case of married women as married women have to give their father's full name. It also contains signature of individual and his photograph. Thus PAN cards serves as identity card of the individual.

PAN Card for Minors do not show photo of minor and carry signature of parent applying for minor as representative. Hence when minor becomes a major, he must apply for new PAN card, give his photo and sign the form. His PAN will remain the same. No new PAN is required or will be allotted.

PAN for NRI and PIO

Penalty for failure to apply for PAN or furnishing wrong PAN. [Sec. 272B of I T Act]
Penalty of Rs.10,000/- can be levied on any person:
i) Who is required to apply for PAN, fails to apply for PAN and comply with other provisions or Section 139A relating to PAN,
ii) Who fails to quote PAN on transaction for which he is required to quote PAN i.e. transaction mentioned above,
iii) Fails to intimate PAN to persons responsible to deduct tax or collect tax at source.

Meet the youngest PAN card holder http://timesofindia.indiatimes.com/Jaipur/Meet_the_youngest_PAN_card_holder/articleshow/3706389.cms