Every person who files an income tax return is required to obtain a number from the income tax department known as “Permanent Account Number” – or, in short, PAN. However, a person who files his/her return for the first time would obliviously not have a PAN, such a person is required to make an application, in duplicate, in the prescribed form no 49a for the allotment of a permanent account number. Even if your net taxable income is below the exemption limit then also it would now be better for you to apply for PAN because your PAN now would also be needed for other investments including mutual funds, etc.
The application for allotment of PAN by an individual tax payer shall be accompanied by the following documents:
1. Proof of identity:
Copy of school leaving certificate or matriculation certificate or degree of a recognized educational institution or depository account or credit card or bank account or water bill or ration card or property tax assessment order or passport or voter identity card or driving license or certificate of identity signed by a member of parliament or member of legislative assemble or municipal councilor or a gazette office, as the case may be.
In case of a person being a minor, any o the above documents of any of the parents or guardian of such minor shall be deemed to be the proof of identity.
2. Proof of Address
Copy of electricity bill or telephone bill or depository account or credit card or bank account or ration card or employer certificate or passport or voter identity card or property tax assessment order or driving license or rent receipt or certificate of address signed by a member of parliament or member of legislative assembly or Municipal councilor or a gazette officer, as the case may be.
In case of a person being a minor, any of the above documents of any of the parents or guardian of such minor shall be deemed to be the proof of address.
PAN is a ten-digit number which remains fixed for an assesse. Various obligations have now been cast on taxpayers in terms of provisions if section 139 as well as Rule 114B whereby it is now compulsory to mention PAN in various documents and transactions including sale/purchase of property of more than rs 5 lakh, sale or purchase of motor vehicles, deposits exceeding rs 50,000, sale and purchase of securities exceeding rs. 1 lakh, making an application for a phone, applying for credit card, opening of bank account, etc.
In case a person is having income much lower than the exemption limit, then he is not required to file income tax return and so he is not allotted a PAN. Such a person can make a deduction in Form No. 60 in respect of those transactions for which it is otherwise mandatory to quote PAN. Generally speaking PAN should be applied for by all those persons who are required to file income tax return when their income exceeds the maximum amount exempted under the Income tax law. Presently for individuals and HUF’s, the general exemption limit is Rs, 2,50,000 p.a. It is not compulsory now to file income tax return merely if you are fulfilling some economic indicators. Senior citizens would enjoy a higher exemptions limit as mentioned earlier.
All partnership firms as also companies are also required to compulsorily file their income tax returns. Filing of income tax return now is also compulsory for undertakings in free trade zones, undertaking which are 100% exports oriented and so also undertaking deriving incomes from export out of India of eligible articles or things enumerated in Section 10BA of the income tax act, 1961. As per the finance bill, 2015 it would now be compulsory to file income tax returns by educational institutions, universities and hospitals even if their incomes are tax exempted.
Hence all such person is also required to make an application for the allotment of PAN. Please remember that making an application for the allotment of PAN and getting the PAN card is simple one time affair. You must preserve this card carefully and quote it in various transactions as announced by the government from time to time The application for PAN can be made direct to the income tax department or in the alternative such application can also be made to the UTI information technology services ltd. Or to National depository services Ltd. With a small fee.
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