In order to curb the tax evasion malpractices, the Income-tax department has now come out with new Pan card rules which will be applicable from coming 5 December. Under this, all business entities doing business worth over Rs 2.5 lakh in FY must have a Permanent Account Number which they must apply for till 31 May of next year.
Here have a quick look at the new amendments:
- in case of a person who is a resident other than an individual which enters into a transaction involving an amount equal to 2.5 lakh or more in a financial year and which has not been allotted any PAN, on or before the 31st day of May immediately following such fiscal year.
- This does not apply to individual taxpayers who are not associated with such entities.
- The latest notification from the income tax department also emphasizes that individuals like the managing director, partner, trustee, author, founder, Karta, chief executive officer or office bearer of such entities should also apply for Pan card till 31 may of next year.
- In case of same list of people as mentioned above 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.
- Resident entities shall have to obtain PAN even if the total sales or turnover or gross receipts are not or are not likely to exceed Rs 5 lakh in a financial year. This will help the IT department prevent tax evasion.