The Central Board of Direct Taxes (CBDT) had issued a notification stating that the Income Tax Rules, 1962, has been amended with effect from December 5.
Below we have listed the changes:
1. From now onwards, it is mandatory for all entities who are dealing in financial transactions of more than Rs 2.5 lac to get a Permanent Account Number. The step has been taken to prevent tax evasion by small businesses.
2. The above-stated rule is applicable to individual taxpayers but only in case if they are involved in business with entities as a Managing Director, Director, Partner, Trustee, Author, Founder, Karta, Chief Executive Officer, Principal Officer or office-bearer or any person competent to act on behalf of the entities.
If an individual does not have a PAN, then he or she is required to do the same till May 31 of the next financial year.
3. One of the new rules is related to those whose mother is a single parent. Such PAN card applicants will no longer be asked to furnish father’s name. However, the applicants had the freedom to choose whose name they want printed on the PAN card — father’s or mother’s.
4. Another amendment that would be effective from today is related to address the concerns of those PAN card applicants whose fathers are either estranged or dead.
Meanwhile, if you need to apply for a PAN Card in future then there is some good news for you. According to Sushil Chandra, Chairman of Central Board of Direct Taxes (CBDT), citizens in near future could get their PAN card within four hours of applying. The decision comes as the Income Tax department is planning to introduce some reforms.
"The I-T department is planning a string of reform measures such as pre-filled returns which would need to be endorsed by an assessee and faster processing of returns," he said.
As per the amended provisions, a resident (other than an individual) who enters into a financial transaction aggregating to Rs 250,000 or more in a financial year is mandatorily required to apply for and obtain a PAN card. This brought entities like companies, partnerships, LLPs, Trust, etc under the purview of PAN subject to the financial transaction threshold.
For example, in case of a financial transaction entered into FY2018-19, the application has to be filed on or before 31 May 2019. Personnel to whom these provisions apply need not be residents. Therefore, a non-resident individual who is a key managerial person in any covered resident entity would now be required to apply for a PAN in India.
In addition to the above amendment, the tax department has also introduced certain changes in the PAN form. This includes doing away with the requirement of quoting the father’s name in PAN applications where the applicant’s mother is a single parent. Currently, furnishing father’s name is mandatory for submitting an application for a PAN card. This was a long-standing request that the government finally accepted.
Apart from the above, some other PAN card rules have also been introduced by the government during the year. For instance, CBDT added another option (i.e. ‘Transgender’) in Gender column of Form 49A/ 49AA (for PAN Application), against the earlier options of ‘Male and Female’ for Individual Applicants, vide Income-tax (Fourth Amendment) Rules, 2018 Notification No. 18/2018, dated 9 April, 2018. Thus, promoting equal rights for every citizen, the PAN application form is now having the option of Transgender, in addition to Male & Female.
The new PAN card rules are expected to widen the tax base and help the government and tax authorities to have more control on entities entering into financial transactions above the specified limit and taking benefit of legislative loopholes.
