With an objective of preventing tax evasion in the future, the Income Tax Department will introduce new Permanent Account Number (PAN) card rules with effect from December 5, 2018.
The notification has also made it mandatory for entities that have made financial transactions worth Rs 2.5 lakh or more in a financial year to apply for a PAN card. The application has to be filed on or before May 31 of the assessment year for which such income is assessable.
“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 lakh 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,” said the new amendment.
While the new rules will not be applicable to ordinary individuals, it will affect those tax payers who are linked to business entities and serving as managing director, director, partner, trustee, author, founder, karta, chief executive officer or office-bearer.
The new provisions are expected to strengthen the taxation system by helping the tax department to tracking financial transactions, broadening the tax base and preventing tax evasion.