There a few changes regarding the Permanent Account Number (PAN) that came into effect yesterday, i.e., December 5. The changes were notified by the income tax department through a notification dated November 19, 2018. Since PAN is an important ID proof to conduct even the most basic of financial transactions, it is important that you are aware of these changes.
Here is a look at what the new rules state.
Father’s name not mandatory for PAN application
If you are going to apply for PAN on or after December 5, 2018, then you will not be required to mandatorily quote your father’s name in the application form. This rule will be applicable if the mother of the applicant is a single parent. The application form will now give the applicant an option as to whether the mother is a single parent and the applicant wishes to furnish the name of only his mother.
The Central Board of Direct Taxes (CBDT) has amended the income tax rules relating to it through a notification dated November 18.
Non-individual entities to apply for PAN card by May 31 of next FY
This year Budget 2018 had amended the Section 139 A of the Income Tax Act making it mandatory for non-individuals who have conducted transactions above Rs 2.5 lakh in a fiscal to mandatorily get PAN. This requirement came into effect from April 1, 2018.
However, the date by which they have to apply for PAN was not notified. Now with the amendment in Rule 114, this date has been notified which is May 31 of the next FY. The date of May 31 was notified via the above mentioned where it was stated that this rule will come into effect from December 5.
Non-individual entities conducting transactions of Rs 2.5 lakh or more in a single financial year will now have to mandatorily get PAN before May 31 of the next financial year. This means that if a Hindu Undivided Entity (HUF) or any other entity enters into a financial transaction of Rs 2.5 lakh or more during FY 2018-19, then they have time till May 31, 2019 to apply for PAN.
The notification further states that an individual who is 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 non-individual (who conducts the transaction of Rs 2.5 lakh or above in a single financial year) and has not been allotted any PAN, will also be required to apply for PAN on or before May 31 of the following financial year.
In the pipeline: PAN card in four hours
According to a Times of India report, you will soon be able to get a PAN card in four hours. The CBDT chairman, Sushil Chandra said this while addressing industry conference. The allotment of PAN in four hours is expected to start within a year.
Chandra said will come out with a slew of automation measures such as pre-payment of taxes, filing of ITR, refunds, case selection and finalisation of cases for scrutiny and so on.