Without pan card higher TDS would be charged by Bank in India
The importance of PAN Card was never realised properly bycommon people,till recently. Suddenly to the horror of income earnersit was found that unless PAN CARD IS PROCURED IMMEDIATELY THEY WOULD BE SUSTAINING GREAT LOSS OF MONEY, if they have Fixed Deposit in Bank. This is becauseby a recent notification by the Central Board of Direct Taxes have announced that the the new rule would take effect of First April 2010. What is the new rule? "Pan must be quoted in all transaction between two entities that involve a tax deduction at source, failing which the tax deducting entity will impose a 20 percent levy". The most non tax payers in Assam donot have PAN Number,even if they have kept money in bank FD. This is the time they apply for PAN Card immediately to avoid penalty.
During the Third week of January,2010 when almost all the National news papers announced the imposition of the new rule people at first panicked and shouted for help. What is the solution, many of the wage earners asked. Fortunately, we in this column forewarned our readers about possibilities of such a steps by Government of India as back as in August 2009. Some of our readers tookquick decision to organise the pan card for their safety. According to us it is even now not too late to organise thePan Card. Every major cities of India have centres managed by UTI who,on application, issue pan card. . In case there is no UTI centre people should visit nearest income tax office and ask for the details of the centre in their own town and area. Income tax department would remain ready to extend helping hand.
In this new provision, mostly widow women, single women, single mother and senior citizens , who do not have organised support system, may suffer if pan details cannot be obtained immediately.It would be prudent for them to seek help of their Friends ,kith and kin and of well wishers. In case pan cannot be quoted while depositing fixed deposit amount and 15 H is not submitted tax will be charged at 20% rate as against 10%. It is needless to mention that PAN (permanent account number) is an identifrication number issue to all entities with taxable income. But many people never applied for PAN for they thought that their incomewas beyond taxable limit hence PAN Card is not necessary. Now even if some persons remain beyound taxable limityet have bank fixed deposit they would need Pan card . In case they canot submit the pan number then tax amount would be deoubled,unless they submit their PAN number to the bank
concerned from First April 2010.
Beside bank transaction of FD any other transaction which is a legal document betwen two parties such as rent deed or a gift deed, transaction is not salary, in most cases the 20 percent levy was higher than the existing TDS(tax deducted at source) rate. Entities could be individuals as well as firms. Though the rule has been notified now, butin the last budget itself it was explained aboutsuch imposition as follows: " The deductees (person from whom income tax is deducted) shall madatorily funish his PAN to the deductor, failing which the deductor shall deduct tax at source at higher rates".
This rule , we understand now, would be applicable to NRI's also,So those persons whose relatives are NRI and have FD or any other transaction in India should forwarn them so that they have their PAN card made soon. This action is imperative. And should be considered seriously. Many of the children of retired persons send remittances to their old
parents.they need to check up if such remittances are subject to TDS. Why such steps have been taken by the central government?
According to informed source as the government is facing huge budget deficit it is trying to pull out all the stops to increase revenue collection fast. For any finacial transaction involving TDS it would be the responsibilites of Deductees to keep deductor apprised of their pan details. Deductors may or may not ask for it from their clients.According to the new provisions , a certificate for deductions at lower rate or no deduction shall not be given by the assessing officer, if there is no PAN.Besides, declaraation by deducteee for non deduction of TDS on payment shall not be valid.
We would however like to advice senior citizens not toworry too much.There is enough time. You need to visit UTI office / Income tax office to organise PAN card ,if it is not taken already.Income earner need to get the PAN card and should intiimate their banksers before 31st March 2010.Perhaps every citizens by now know that in the recent budget a provision has been incorporated that any persons having invested money in fixed deposit would require to quote the pan number. This provision will be applicable to all persons irrespective of the fact that he or she is not even income tax payers. The banks ar being advised to deduct money if no pan numbers are quoted even by non income tax payers from April next. In case wrong mentionning of Pan card number also by depositors there would be 20% deduction of tax, as a penalty.
Till recently Pan card was a necessity for the income tax payers who submit income tax returns annually.
now a days pan card is necessary for buying a car, or owning a cell phone number. Now pan card would be necssary for Fix Deposit in Bank even if he not a tax payer.
. Now Pan card is required for any kind of financial transaction..I would there fore like to recommend all persons having fixed deposit in bank or in Government or non Government organisation to apply for PAN number for his own benefit. What is a PAN CARD ?
I will try to answer like a lay man. The PAN is the abbreviation of Permanent Account Number . Actually this is a unique number allotted to individual or a corporate entity by department of income tax, Government of India. It is more an identification number . The PAN card is a plastic coated/laminated card containing an alphanumeric number, mentioning name, father's name, date of birth, the signature, person's photo and, of course, the PAN number and logo of government. of India and dept. of IT. By default , a PAN number
has five letters first, then four digits and then one letter again. The uses of Pan card was for mainly following reasons.:
1 Till now, it was mandatory to have a pan cardfor every Indian who's income exceeds tax free limit. ( this provision is being changed from next April)
2. It serves as an photo-identity card as an Indian citizen .
With the new change in law Pan number become necessary for everyone who has FD account in Bank including a widow who may earn an income of below Rs one lakh ninety thousand.. The threshold limit for payment of income tax for all categories of persons have recently been upwardly revised and most of the retired senior citizen and some of the ladies have become out of income tax net. From next April a widow earning below the threshold limit ,even if she has submitted the form 15 , income tax would be deducted by bank for her fixed saving in bank, in case Pan number is not submitted. In certain
case if pan numbers are wrongly quoted, may be due to inadvertence, for them also tax will be deducted at the double the rate. This is where shoe would pinch for a widow or a lone lady or for a senior citizen. The persons having bank FD etc must be very vigilant if they want to avoid unnecessary deduction of tax and penalty from now onward.
This provision would be applicable to ordinary common salary earners also unless he submits pan card number. Many senior citizen never was to apply for pan card thinking that they were beyond the ambit of income tax hence no pan card was required. This was a valid argument till now. But from next April onward if pan card number is not submitted to the Bank or any other other authorities income tax would be deducted on payment of interest amount.
My humble suggestion is not to panic . There are ample time to apply for apan card. In any case the provision would be applicable
from next April only. We have some time to get organised for a pan number. Having a pan card is very useful and easy. It can be used as a photo identity card also beside using for all financial transaction. This number is actually isued by income tax department to track any financial transaction and also to ensure non evasion of tax by eligible citizen. The pan card is very useful for all the citizens, for our country donot have a Social security number like develop countries of the world.. The importance of PAN card would continue till unique Identification number is issued by the central Government to each citizen. The project has already been taken up recently. A few persons recently wrote to me asking as to how and where PAN card could be applied?
The Income tax Department has authorised UTI investors services Limited to manage and issue pan card for smooth issuance of the card.. It can be applied on line also through internet fascility for
the application form. There is a specific application form and that should be filled up to enable UTI Invetors Services Limted to issue PAN number with photogtraph. A small fee is also charged for the fascility. The pan card can be issued to NRI also. Now all senior citizens,single women and children having FD at bank or in companies should rush to UTI Investors Centre and get the pan card if not recei ved already to avoid higher incidence of tax.
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