Four changes in PAN card rules you must be aware of
As per the amended provisions, a resident (other than an individual) who enters into a financial transaction aggregating to Rs 250,000 or more in a financial year is mandatorily required to apply for and obtain a PAN card. This brought entities like companies, partnerships, LLPs, Trust, etc under the purview of PAN, subject to the financial transaction threshold.
“The expanded provisions also made PAN mandatory for key managerial personnel in such resident entities, ie Managing Director, Director, Partner, Trustee, Author, Founder, Karta, Chief Executive Officer, Principal Officer or office bearer of the entities as mentioned above. Such personnel would also be required to apply for a PAN (if not already allotted) within the prescribed timeline. However, the timelines within which PAN was to be applied for by the resident entities or its key personnel had not been prescribed,” says Akhil Chandna, Director-Tax, Grant Thornton India LLP.
1. The government recently amended the rules to prescribe the time within which such resident entities or the key personnel are required to apply for a Permanent Account Number. The new ‘PAN rules’, as referred to in common parlance, have become applicable from December 5, 2018.
Resident entities need to file the PAN application on or before 31 May immediately following the financial year in the financial transaction was entered into. For example, in case of financial transaction entered into Financial Year 2018-19, the application has to be filed on or before 31 May 2019.
2. The key managerial personnel, Managing Director, Director, Partner, Trustee, Author, Founder, Karta, Chief Executive Officer, Principal Officer or office bearer of the entities, as mentioned above, would also be required to apply for a PAN within the timeline as applicable to the resident entity in which they hold such position.
“It may, however, be noted that the PAN-related provisions do not define the type of ‘financial transactions’ which are covered for this purpose and a clarity in this regard would be welcome. Also, important to note that the key managerial personnel to whom these provisions apply need not be residents. Therefore, a non-resident individual who is a key managerial person in any covered resident entity would now be required to apply for a PAN in India,” informs Chandna……..Read More>>