PERMANENT
ACCOUNT NUMBER (PAN)..
The
Permanent Account Number (PAN) issued by Income Tax (IT) Department is the
critical element in capturing incomes & expenditures of a person.
The
Finance Act 1998 laid down that under Section 139A a person whose taxable
income is beyond threshold limit or / turnover exceeds Rs. 5 lakh is required
to apply for PAN.
Every
person has to quote PAN on any document dealing with Income tax department and
financial transactions exceeding the specified limit.
It
has been made compulsory for tax deductors to quote PAN of the deductees in the
return of tax deducted and certificate issued to the deductees with effect from
June 1, 2001. The Finance Act 2009 provided that if PAN is not quoted by the
deductee, the TDS rate will be 20% in stead of 10% under Sections 194I and
194C.
The
main purpose of these amendments has been to compel people to quote PAN, so
that information contained in such returns or certificates can be processed
properly.
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