Are all PAN Card holders required to file their return of income? This is the question raised by many persons who possess PAN Card. We need to understand the requirement of PAN Card first before answering this query.
Who are mandatorily required to obtain PAN ?
Section 139A of the Income-tax Act provides that the following persons shall apply for Permanent Account Number (PAN) :-
i) Every person, whose total income during the previous year exceeds maximum amount not chargeable to tax (ie.,) Basic Income-tax exemption.
The following table illustrates the position for the financial year 2011-12 (A.Y.2012-13)
|
Assessee Type |
Basic Exemption Limit |
|
Resident Women below 60 years of age |
Rs. 190000/- |
|
Resident senior citizen above 60 years and less than 80 years of age |
Rs.250000/- |
|
Resident Super Senior citizen above 80 years of age |
Rs. 500000/- |
|
All other Individuals |
Rs. 180000/- |
ii) Any person , carrying on business (or) profession whose total sales,turnover or gross receipts exceeds are likely to exceed Rs. 500000/- in any previous year.
Apart from the above, PAN is mandatorily required to be quoted in the following transactions :-
a) Saleor purchase of any immovable property (Land/Plot/Flat/House Property etc.,) valued at Rs.500000/- or more.
b) Sale(or) Purchase of Motor Vehicle/Vehicle , where the same is required to be registered with a registrar.
c) Deposits (FD/CD) exceeding Rs. 50000/- to be made with any bank/Post Office
d) Purchase /Saleof securities exceeding Rs. 100000/-
e) For opening a Savings/Current Account with any bank
f) For making an application for allotment of Telephone Connection (including cell phone connection)
g) Payment to hotels/restaurants for their bills if the amount exceeds Rs. 25000
h) For taking Demand Draft in banks exceeding Rs. 50000/- by payment of cash.
i) Deposit in cash exceeding Rs. 50000/- or more during a day with any bank
j) Payment in cash in connection with travel to any foreign country of an amount exceeding Rs. 25000/- at any one time
k) At the time of making any application for Credit Card.
l) Payment exceeding Rs. 100000 /- for Mutual fund / shares purchases
In the instances mentioned above, PAN number is required to be quoted mandatorily. In case if any person entering into the above transactions does not have a PAN, he/she has the option of providing declaration in Form 60.
Click the link below to download Form 60.
[wpdm_file id=19]
Who are required to file return of income ?
As per Section 139(1) of the Income-tax Act, a person other than a company or firm shall file his return of Income if the Income (with out claiming deduction under sections 10A,10B,10BA,80C to 80 U, practically Gross Total income without claiming exemptions) exceeds the amount of exempted slab. (Rs. 180000, Rs.190000 , Rs. 250000 & Rs. 500000 , as the case may be)
Conclusion :-
1) If you are going to enter into specified transactions for only once and there won’t be any further transactions of same nature, you can opt for declaration in Form 60 and thereby avoid the lens of the tax man.
2) Even though the income is lesser than taxable limits, in order to have a continuity of filing the return of income, the return of income shall be filed.
3) Most of the Financial Insititutions, Banks request for the Income tax return filed copies for assessing the repayment capacity of the borrowers. In such a case, filing of return of Income will be of helpful to the assessees eventhough the total income is below taxable limits.
4) Filing of return of income is a way of communicating your income details to the Income-tax department. Assuming till last year your income was above taxable limits and the returns had been filed and for the current year, if the income is below taxable limits and if the same is not filed, the Income tax department may not know the actual reason for non filing of the same. Hence in our opinion, for the first few years of income below taxable limits, it is better to file the return of income and thereafter intimate the Income-tax officer about your income status. As a result, communications/notices from the Income-tax department for non filing of returns can be avoided.
5) In some cases, even though the income is below taxable limits, there might be Tax Deducted at Source (TDS) on various payments. In order to claim the refund of those TDS from the Income-tax Department, it becomes necessary to file the return of Income.
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