Persons Liable to Apply PAN & Transactions Which Require PAN

Most readers of this website ask us that are they liable to apply PAN? In which transactions PAN is mandatory? As there are lots of confusion over PAN. So we sum up here complete detail about PAN that who are required to apply PAN and in which transaction you should provide PAN while making that transactions.

Persons Liable to Obtain PAN

Income Tax Assessees

  1. According to income tax department all income tax assessee should apply PAN irrespective of payable tax. So if your income exceeds the basic exemption limit you must apply for PAN in that particular financial year. Check basic exemption limit
  2. If you are doing any business or profession then you must apply PAN if your business or professional gross receipts are over Rs. 5 lakh during that particular financial year.
  3. In case of a charitable or religious trust liable to file return of income u/s 139(4A), the application for allotment of PAN should be made before the end of the accounting year.
  4. In case of a person entitled to receive any sum/income/amount, liable to TDS, in any financial year, the application for allotment of PAN should be made before the end of such financial year.
  5. It is compulsory to apply for PAN, in above cases even though the tax payable in nil.

Besides, all existing assesses who have not been allotted a Permanent Account Number under the new 10-digit alphanumeric series, are also required to apply for a Permanent Account Number under the new series to the concerned Assessing Officer.

Other Tax Assessees

Following persons are also required to obtain PAN –

  1. Exporters and importers, who are required to obtain an importer – exporter code;
  2. Assessees under the Central Excise Act;
  3. Persons issuing Cenvatable invoices under rule 57AE and registered under the Central Excise Rules, 1994;
  4. Service-tax assessees;
  5. Persons registered under the Central Sales Tax Act, 1956 or the general sales tax law of the appropriate State or Union Territory.

Specified Persons

The Central Government may require, by a notification, any class or classes of persons to apply for PAN within the specified time, for the purpose of collecting any information useful or relevant for income-tax purposes.

Other persons

Any person not falling in any of the categories aforesaid may also apply for PAN.

Specified Transactions Which Required PAN

Persons intending to enter into following transactions, for which furnishing PAN is mandatory, shall also be required to obtain PAN (whether any tax is payable or not):

  • If the payment is 5 lakh or over 5 lakh in sale & purchase of immovable property.
  • Any transaction made for sale & purchase of vehicles excluding two wheelers.
  • Over Rs.50000 deposit in any bank & post office regarding time deposit or post office savings.
  • Securities sale or purchase contract over 1 lakh.
  • To open bank account (except if you are providing form no.60 or 61).
  • To apply mobile phone or telephone connection.
  • Over Rs.25000 bill payment of hotels & restaurants.
  • Payment in cash for purchase of bank draft/pay orders/banker’s cheque from a bank, for an amount Rs. 50,000 or more any one day.
  • Cas deposit over Rs.50,000 in the bank.
  • Payment in cash in connection with foreign travel (including payment towards fare, or to a travel agent or a tour operator [or to an authorized person under FEMA], or for purchase of foreign currency) of an amount exceeding Rs. 25,000 at any one time.
  • To apply debit card & credit card in bank.
  • Over Rs.50,000 payment to mutual fund, acquiring shares or debentures of a company, RBI bonds, LIC premium and purchase of jewellery.
  • All share sale & purchase transactions.
  • Deletion of name of deceased shareholder, transmission of shares to legal heirs, change in order of names in case of physical shares.
  • Notes: (1) The concerned authority/person receiving any document in respect of the aforesaid transactions shall be required to furnish the copies of relevant documents to the Income-tax Departments, on half-yearly basis.

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