Permanent Account Number (PAN)

In the present financial System and Tax Scenario, we widely listen about Permanent Account Number, which is in vogue as "PAN”. This buzz word will have more significance from 1st April 2010

 

 

From the commencement of this financial year (2010-11), PAN needs to be furnished to the tax deductor for all the business transactions. If PAN is not furnished to the deductor by the deductee, The tax deductor will impose a Higher Rate @ 20% in all such cases.

 

 

 

How it will impact me!!!

Deductor

Deductee

 

Ensure that the PAN is quoted by all the Deductee’s at the time of recording in the Books (or) before settling their payment.

 

If the Deductee has not quoted the PAN, the Deductor has to ensure to deduct TDS at a Higher rate of 20%.

 

 

 

 

 Mentoring:

Identify the List of Vendors with Missing PAN’s and send the communication to them to furnish the copy of the same.

 

 

Ensure that a Copy of the PAN Card is given to Deductor, so that as a Deductee, you will not get attracted with higher TDS Rate.

 

Eg: Contractors providing services to a Business entity (Deductor) in the normal course, the Deductor will apply the TDS @ 2%

 

Whereas if the PAN is not provided by the Deductee, the Deductor will apply the TDS @ 20%.


Mentoring:

Quote the PAN in all the Correspondence with the deductor. Also make sure that a copy of PAN is acknowledged by the Deductor.

 

 

 

 * Transactions from 1st April 2010

 

Transport Contract Deductee’s enjoy a special privilege from 1st October 2009 with NIL deduction of tax, if they furnish their PAN to the deductor.


Act now and apply for PAN!!!

In true sense, the impact of the above items is going to effect from 1st week of May 2010. Because the Deductor will deposit the TDS amount collected from the Deductee (For the transaction occurred from 1st April 2010 to 31st April 2010) by 7th May 2010.

As on 1st April 2010, the deductee is having a minimum of 30 Days time to apply for the PAN. Hurry up and get the PAN, if you don’t have one through:

http://www.tin-nsdl.com/DownloadsPAN.asp
http://www.utitsl.co.in/utitsl/uti/newapp/newpanapplication.jsp

eTaxMentor TEAM recommends to have PAN to each person / entity