The Income Tax Department has revised rules for PAN (permanent account number) card applicants. The new rules will come into effect from December 5, 2018. Companies which make transactions worth Rs. 2.5 lakh or more in a financial year must apply for a PAN card. An individual who does a financial transaction of an amount of Rs. 2.50 lakh or more in a financial year will also need to apply for a PAN card on or before the May 31, 2019.
There will be also some changes in the application form of a PAN card.
Five things you must know about new PAN card rules:
1. It will not be mandatory to provide father's name for a individual whose mother is a single parent.
2. In case a managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer (or any such person who does not have PAN), he/she will also be required to apply for PAN on or before May 31 of the following financial year, the notification said.
3. The PAN card will still play an important for tax assessment and will be required for financial transactions, opening bank accounts and filing of income tax returns.
4. The companies that make financial transactions worth Rs 2.5 lakh or more in a financial year to apply for a PAN card.
5. Resident entities shall have to obtain PAN card even if the total sales/ turnover/ gross receipts doesn't exceed Rs 5 lakh in a financial year.