To avoid ruse of tax, the PAN card rules have been changed by the Income Tax department. The new rules will come in to effect from 5 December. The rules are mandatory to follow by all entities doing business worth over Rs 2.5 lakhs in a year.
Listed below are 5 things to know about new PAN card rules:
1: According to the new amendment in Income Tax Rules, 1962,
“In the case of a person, being a resident, other than an individual, which enters into a financial transaction of an amount aggregating to two lakhs fifty thousand rupees or more in a financial year and which has not been allotted any permanent account number, on or before the 31st day of May immediately following such financial year,” .
2: Individual taxpayers who are not linked with such entities need not to follow the rule.
3: According to the new I-T department notification, the individuals like the managing director, director, partner, founder, chief executive officer or office-bearer of such entities should apply for a PAN card, in case they don’t have one, within 31 May of the upcoming financial year.
4: As per the amendment “In the case of a person, who is the managing director, director, partner, trustee, author, founder, 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,”.
5: Suraj Nangia who is the Nangia Advisors LLP Partner said that now resident individuals shall have to get PAN even if the total sales or turnover or gross receipts are not likely to exceed Rs 5 lakhs in a financial year.