The Income Tax Department recently changed the PAN card rules in order to prevent tax evasion. The new rules will come into effect from December 5, 2018. The new rule has made it mandatory for all businesses with a net turnover/ gross income of up to Rs 2.5 lakh per year to have a PAN.
As per the Central Board of Direct Taxes (CBDT) notification, all business entities with annual financial transactions of up to Rs 2.5 lakh are required to apply for a PAN card till May 31 next year.
1. The new income tax rule does not concern individual taxpayers who are not associated with entities mentioned above.
2. Managing director, director, partner, trustee, author, founder, Karta, chief executive officer or office-bearer of such entities are required to apply for a PAN card, in case they don’t have one, till May 31, 2019.
3. The amendment states, “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 of the person referred to in clause (v) or any person competent to act on behalf of the person referred to in clause (v) and who has not been allotted any permanent account number, on or before the 31st day of May immediately following the financial year in which the person referred to in clause (v) enters into financial transaction specified therein.”
4. All resident entities shall now have to obtain a PAN even if the total sales or turnover or gross transactions are not Rs 5 lakh or above in a financial year.
Worth mentioning here is that the Income Tax department also made it optional for individual taxpayers to furnish their father’s name in PAN card application form of applicants with single parents, which was mandatory before. in case the applicant’s father has passed away or separated, they can choose whether or not they want to mention their father’s name in their application form.