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Taxation

Permanent Account Number (PAN)

Permanent Account Number (PAN)

PAN is an all India, unique ten-digit alphanumeric number, issued in the form of a laminated card by the Income Tax Department. It does not change with changes in address or place where you are being assessed. For obtaining PAN related information the Income Tax department has authorized :- (i) UTI Technology Services Ltd (UTITSL) to set up and manage IT PAN Service Centers in all those cities or towns where there is an Income Tax office and (ii) National Securities Depository Limited (NSDL) to dispense PAN services from Tax Information Network (TIN) Facilitation Centers.

Who shall apply for PAN

Income Tax Act provides that every person whose total income exceeds the maximum amount not chargeable to tax or every person who carries on any business or profession whose total turnover or gross receipts exceed Rs.5 lakhs in any previous year or any person required to a file a return of income shall apply for PAN. Besides, any person not fulfilling the above conditions may also apply for allotment of PAN. With effect from 01.06.2000, the Central Government may by notification specify any class/classes of person including importers and exporters, whether or not any tax is payable by them, and such persons shall also then apply to the Assessing Officer for allotment of PAN. With effect from 01.04.2006 a person liable to furnish a return of fringe benefits is also required to apply for allotment of PAN. And if such a person already has been allotted a PAN he shall not be required to obtain another PAN.

Since income of any financial year is taxed in the subsequent year called as the assessment year, application for PAN must be made on or before the 30th of June of the relevant assessment year.

How to apply for PAN

Application for allotment of PAN is to be made in Form 49A. Following points must be noted while filling this form :

  • Application form must be typewritten or handwritten in black ink in BLOCK LETTERS.

  • Two black & white photographs are to be annexed.

  • While selecting the "Address for Communication", due care should be exercised as all communications thereafter would be sent at the indicated address.

  • In the space given for "Father's Name". Only the father's name should be given. Married ladies may note that husband's name is not required and should not be given.

  • Due care should be exercised to fill the correct date of birth.

  • The form should be signed in English or any of the Indian Languages in the 2 specified places. In case of thumb impressions attestation by a Gazetted Officer is necessary.

Transactions in which quoting of PAN is mandatory :
  • Purchase and sale of immovable property.

  • Purchase and sale of motor vehicles.

  • Transaction in shares exceeding Rs.50,000.

  • Opening of new bank accounts.

  • Fixed deposits of more than Rs.50,000.

  • Application for allotment of telephone connections.

  • Payment to hotels exceeding Rs.25,000.

  • Provided that till such time PAN is allotted to a person, he may quote his General Index register Number or GIR No.

The following changes must be intimated to the assessing officer :
  • Death of the assessee.

  • Discontinuation of business.

  • Dissolution of a firm.

  • Partition of a Hindu Undivided Family(HUF).

  • Liquidation or winding up of a company.

  • Merger or amalgamation or acquisition of companies.

Application for a fresh PAN under the new series must be made under the following conditions :

  • Partition of a Hindu Undivided Family(HUF) into one or more new Hindu Undivided Families(HUF's).

  • Coming into being of new HUF's.

  • Change in constitution of a firm(entailing change of partners).

  • Splitting up or demerger of an existing company into two or more companies.

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Other Categories

Taxation
Taxation of Individuals
Who is liable to pay income tax
Sources of Income
Income from Salaries
Income from Capital Gains
Income from House property
Income from Profits & gains of business or profession
Income from other sources
Taxation of Partnerships
Customs Duties (Import Duty and Export Tax)
Wealth Tax
Taxation of Corporates
Taxation of Agents
Excise Duty
Permanent Account Number (PAN)
Taxation of other forms of business entities
Taxation of Trusts
Taxation of Small Scale Industries
Joint Venture Companies
Cooperative Societies
Taxation of Representative offices
Service Tax
TDS,TCS,TAN
Value Added Tax (VAT)


Introduction

India has a well developed tax structure. The power to levy taxes and duties is distributed among the three
tiers of Government, in accordance with the provisions of the Indian Constitution. The main taxes/duties that
the Union Government is empowered to levy are:- Income Tax (except tax on agricultural income,
which the State Governments can levy), Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the State Governments are:- Sales Tax (tax on intra-State sale of goods), Stamp Duty (duty on transfer of property), State Excise (duty on manufacture of alcohol), Land Revenue (levy on land used for agricultural/non-agricultural purposes), Duty on Entertainment and Tax on Professions & Callings. The Local Bodies are empowered to levy tax on properties (buildings, etc.), Octroi (tax on entry of goods for use/consumption within areas of the Local Bodies), Tax on Markets and Tax/User Charges for utilities like water supply, drainage, etc.

In the wake of economic reforms, the tax system in India has under gone a radical change, in line with the
liberal policy. Some of the changes include:- rationalization of tax structure; progressive reduction in peak
rates of customs duty; reduction in corporate tax rate; customs duties to be aligned with ASEAN levels;
introduction of value added tax; widening of the tax base; tax laws have been simplified to ensure better compliance. Tax policy in India provides tax holidays in the form of concessions for various types of investments. These include incentives to priority sectors and to industries located in special area/ regions. Tax incentives are available also for those engaged in development of infrastructure.