The Hush Post|13:30 pm|2-min-read
The Income Tax Department has recently changed the PAN card rules in order to avoid tax evasion. The new PAN card rules will come into effect from December 5, 2018. Now, it is compulsory for all businesses with a net turnover/ gross income of up to Rs 2.5 lakh per year to have a PAN card. PAN is an identification number which is required for financial transactions such as opening of a bank account and filing of Income Tax Returns (ITR). The Central Board of Direct Taxes (CBDT) notification reads as follows:
- In case a managing director, director, partner, founder, karta, chief executive officer, trustee, author, principal, officer or office bearer (or any such person who does not have PAN), he/she will also be required to apply for PAN on or before May 31 of the following financial year, the notification said.
- The resident entities shall have to obtain PAN even if the total sales/ turnover/ gross receipts are not likely to exceed Rs 5 lakh in a financial year. This will help the income tax department to track financial transaction, broaden its tax base and avoid tax evasion.
- The amended rules provide that furnishing of father’s name will not be mandatory for a person whose mother is a single parent.
- The Income Tax Department also announced certain changes in the application form for PAN.
- In case of being a resident, other than an individual, which enters into a financial transaction of Rs Rs 2.5 lakh or more in a financial year and does not have a permanent account number, on or before the 31st May, must immediately do so of the following financial year.