Permanent Account Number (PAN) is a ten-digit unique alphanumeric number issued by the Income Tax Department. The Primary purpose of the PAN is to bring a universal identification to all financial transactions and to prevent tax evasion by keeping track of monetary transactions.
Section 139A inter-alia provides that every person specified therein and who has not been allotted a permanent account number shall apply to the Assessing Officer for allotment of a PAN. The following persons are mandatorily required to apply to the Assessing Officer (AO) for the allotment of PAN.
1. Income exceeds exemption Limit
If the total income of assessee or the total income of any other person in respect of which he is assessable under income tax act during any previous year exceeded the maximum amount which is not chargeable to income-tax.
2. Turnover Exceeding Rs. 5,00,000
The person carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed Rs 500,000 in any previous year.
3. Charitable and Religious Trusts
The charitable and religious trusts who are required to furnish the return of income under section 139(4A).
4. Employer required to furnish return of Fringe Benefits
Every employer who is required to furnish a return of fringe benefits under section 115WD.
The Finance Act’2018 has also caste the requirement to obtain PAN on resident persons other than an individual which enters into a financial transaction of an amount aggregating to Rs. 2,50,000 or more in a financial year shall be required to apply to the Assessing Officer for allotment of PAN.
6. Natural Persons managing Legal Entities
The 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 resident person other than an individual which enters into a financial transaction of an amount aggregating to Rs. 2,50,000 or more in a financial year.
The persons other than those who are mandatorily required to obtain PAN may also apply to the Assessing Officer for the allotment of a PAN and, thereupon, the Assessing Officer shall allot a PAN to such person forthwith.
Every person is required to quote PAN in all his returns, challans and all his correspondence with the income tax department. The Rule 114B has prescribed transactions in relation to which permanent account number is to be quoted in all documents.
If the person entering into transactions specified in Rule 114B is a minor and who does not have any income chargeable to income-tax, he shall quote the permanent account number of his father or mother or guardian.
The person entering into transactions specified in Rule 114B who does not have PAN may submit a declaration in Form 60. The form 60 is basically a declaration from a person who does not have PAN. However, the companies and firms cannot submit a declaration in Form 60.
The declarant submitting the Form 60 shall satisfy himself that the information furnished is true, correct and complete in all respects. Any person making a false statement in the declaration shall be liable to prosecution under section 277 of the Income-tax Act, 1961 and on conviction be punishable as below:
1. In a case where tax sought to be evaded exceeds Rs 25,00,000, with rigorous imprisonment which shall not be less than 6 months but which may extend to 7 years and with fine;
2. In any other case, with rigorous imprisonment which shall not be less than 3 months but which may extend to 2 years and with fine.
Rule 114B: Transactions in relation to which permanent account number is to be quoted in all Documents
The following transactions are specified in Rule 114B:
|S.No.||Nature of transaction||Value of transaction|
|1.||Sale or purchase of a motor vehicle or vehicle other than two wheeled vehicles.||All such transactions.|
|2.||Opening an account [other than a time-deposit referred to at Sl. No.12 and a Basic Savings Bank Deposit Account] with a banking company or a co-operative bank.||All such transactions.|
|3.||Making an application to any banking company or a co-operative bank to any other company or institution, for issue of a credit or debit card.||All such transactions.|
|4.||Opening of a DEMAT account||All such transactions.|
|5.||Payment to a hotel or restaurant against a bill or bills at any one time.||Payment in cash of an amount exceeding Rs 50,000.|
|6.||Payment in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time.||Payment in cash of an amount exceeding Rs 50,000.|
|7.||Payment to a Mutual Fund for purchase of its units.||Amount exceeding Rs 50,000.|
|8.||Payment to a company or an institution for acquiring debentures or bonds issued by it.||Amount exceeding Rs 50,000.|
|9.||Payment to the Reserve Bank of India for acquiring bonds issued by it.||Amount exceeding Rs 50,000.|
|10.||Deposit with, —
(i) banking company or a co-operative bank
(ii) Post Office.
|Cash deposits, —
(i) exceeding Rs 50,000 during any one day; or
(ii) aggregating to more than Rs 250,000 during the period 09th November, 2016 to 30th December, 2016.
|11.||Purchase of bank drafts or pay orders or banker’s cheques from a banking company or a co-operative bank||Payment in cash for an amount exceeding Rs 50,000 during any one day.|
|12.||A time deposit with,—
(i) a banking company or a co-operative bank
(ii) a Post Office;
(iii) a Nidhi referred to in section 406 of the Companies Act, 2013 (18 of 2013); or
(iv) a non-banking financial company which holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934 (2 of 1934), to hold or accept deposit from public.
|Amount exceeding Rs 50,000 or aggregating to more than Rs 500,000 during a financial year.|
|13.||Payment for one or more pre-paid payment instruments, as defined in the policy guidelines for issuance and operation of pre-paid payment instruments issued by Reserve Bank of India under section 18 of the Payment and Settlement Systems Act, 2007 (51 of 2007), to a banking company or a co-operative or to any other company or institution.||Payment in cash or by way of a bank draft or pay order or banker’s cheque of an amount aggregating to more than Rs 50,000 in a financial year.|
|14.||Payment as life insurance premium to an insurer||Amount aggregating to more than Rs 50,000 in a financial year.|
|15.||A contract for sale or purchase of securities (other than shares)||Amount exceeding Rs 100,000 per transaction.|
|16.||Sale or purchase, by any person, of shares of a company not listed in a recognized stock exchange.||Amount exceeding Rs 100,000 per transaction.|
|17.||Sale or purchase of any immovable property.||Amount exceeding Rs 10,00,000 or valued by stamp valuation authority referred to in section 50C of the Act at an amount exceeding Rs 10,00,000 rupees.|
|18.||Sale or purchase, by any person, of goods or services of any nature other than those specified at Sl. Nos. 1 to 17 of this Table, if any.||Amount exceeding Rs 2,00,000 per transaction:|
Non-Applicability of Rule 114B
The provisions of Rule 114B are not applicable to the following class of persons:
1. The Central Government, the State Governments and the Consular Offices.
2. The non-residents in respect of the transactions other than a transaction referred to at Sl. No. 1 or 2 or 4 or 7 or 8 or 10 or 12 or 14 or 15 or 16 or 17 of the above Table.
Requirement to furnish Form 61
The Rule 114D have prescribed the time and manner in which the declarations received in Form 60 by the concerned persons have to be filed with the Income Tax Department. These have to be submitted in Form 61. The form 61 is basically a Statement containing particulars of declaration received in Form No. 60.
The following persons are required to submit the Form 61.
1. The persons mentioned below who are in receipt of declaration in form 60 for the transactions mentioned in table above (except transaction mentioned in S.No. 5,6 and 18)
|Sr. No.||Person being||Referred to at S.No. of Above Table|
|1||a registering officer or an Inspector-General appointed under the Registration Act, 1908|
|2||a person who sells the immovable property or motor vehicle|
|3||a manager or officer of a banking company or co-operative bank||2,3,10,11,12,13|
|5||stock broker, sub-broker, share transfer agent, banker to an issue, trustee of a trust deed, registrar to issue, merchant banker, underwriter, portfolio manager, investment adviser and such other intermediaries registered under SEBI Act, 1992|
|6||a depository, participant, custodian of securities or any other person registered under SEBI Act, 1992||4|
|7||the principal officer of a company||3,4,8,12,13,15,16|
|8||the principal officer of an institution||2,3,8,10,11,12,13|
|9||any trustee or any other person duly authorized by the trustee of a Mutual Fund||7|
|10||an officer of the RBI, constituted under RBI Act, 1934, or of any agency bank authorized by the RBI|
|11||a manager or officer of an insurer||14|
2. Any person raising bills for the transactions referred to in S.No. 5,6 and 18, if he is required to get his accounts audited under section 44AB.
Where to Submit Form 61
Form 61 shall be furnished to the Director of Income-tax or the Joint Director of Income-tax through online transmission of electronic data to a server designated for this purpose and obtain an acknowledgement number.
The income tax department has launched a new reporting portal https://report.insight.gov.in/. With effect from 9th April 2018, registration, statement upload and all other facilities for Form No. 61, 61A and 61B have been migrated from the e-filing portal to the reporting portal.
Retention Period for Form 60
Every person who is required to file Form 61 shall retain such Form No. 60 for a period of Six Years from the end of the financial year in which the transaction was undertaken.
Due date for furnishing Form 61
The Form 61 has to be filed half yearly. The due dates prescribed for furnishing form 61 are as below:
|Particulars||Due Date of Uploading Form 61|
|Declaration in Form 60 received during 1st April to 30th September||31st October of that year|
|Declaration in Form 60 received during 1st October to 31st March||30th April of the F.Y immediately following the F.Y in which the form is received|
Penalty for Non-Compliance
The Penalty for failure to comply with the provisions of section 139A is leviable under Section 272B. If a person fails to comply with the provisions of section 139A, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of Rs 10,000