The Department of Revenue has put into effect new rules with respect to Permanent Account Number (PAN) to check tax evasion and allow more options to the taxpayers.
The changes in the Income Tax Rules, 1962, have already been notified by the Central Board of Direct Taxes (CBDT) in a notification on November 19, 2018.
The crucial changes that came into effect are as follows:
1. A resident person other than an individual - such as Hindu Undivided Family, firm, charitable trusts, association of persons, body of individuals, a local authority or company - who enters into a financial transaction amounting to Rs 2.50 lakh or more in a financial year and who has not been allotted any PAN, shall apply for one by May 31 of the next financial year.
2. A person, who is the managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of the entities mentioned above or any person competent to act on behalf of such entities, and who has not been allotted any permanent account number, shall apply for one by May 31 of the financial year following the fiscal in which the specified entities enter into financial transaction worth Rs 2.50 lakh or more.
3. Mentioning father's name in PAN card applications filed will not be mandatory for applicants whose mother is a single parent. Also, the revised application forms 49A (for Indians) and 49AA (for foreign nationals) will have the option for all applicants to choose whether they wish to have their father's or mother's name on their PAN cards. In case no option is selected in the PAN application form, the father's name will be shown on the PAN card.