Income tax rules make it compulsory for certain individuals and entities to obtain a PAN or Permanent Account Number. PAN - a 10-digit alphanumeric identification number - is issued by the Income Tax Department to assessees, including individuals and charitable trusts. Besides, even individuals not required to file income tax returns can also apply for a PAN online on a voluntarily basis. The Income Tax Department has on its website - incometaxindia.gov.in - described the entities who are required to obtain a PAN. (Also read: Want to apply for a PAN card online? Here's everything you need to know)
Here are some details about the entities required to have a PAN card, as described by the Income Tax Department:
Individuals with a total income in the previous year exceeding the income tax threshold are required to obtain a PAN, according to the taxman. In other words, those with a taxable income in a financial year are required to obtain a PAN.
A charitable trust required to furnish return under Section 139 (4A) of the Income Tax Act is required to obtain a PAN.
Individuals carrying on any business or profession wherein the total sale, turnover, or gross receipts are likely to exceed Rs 5 lakh in any previous year are also required to have the identification number.
Other individuals required to have a PAN include those intending to enter into specified financial transactions in which quoting of the 10-digit alphanumberic number is mandatory.
Non-individual resident persons and person associated with them are required to obtain a PAN if the financial transaction during a financial year exceeds Rs 2.5 lakh.
Persons associated with non-individual resident persons include individuals such as managing directors, directors, partners, trustees, authors, founders, chief executive officers, principal officers and office bearers of the non-individual resident persons, and other persons competent to act on behalf of such persons, according to the Income Tax Department website.
Besides, individuals not covered in any of the above can voluntarily apply for PAN, the taxman adds.
Meanwhile, the taxman has announced September 30 as the due date for assessees to link the two "unless specifically exempted".
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