The Central Board of Direct Taxes (CBDT) has announced that new income tax rules related to PAN card will come into effect from December 5 under the Income-tax (Twelfth Amendment) Rules, 2018 Act.
So from 5th December, to make any transaction worth more than Rs 2 lakh and to open up a new bank account, you will need to have the Permanent Account Number aka PAN card. Also, anyone who makes transactions of Rs 2.5 lakh per year or more will need a PAN card, and if they don’t have one, they need to apply for it before May 31, 2019 in all three above mentioned cases. As per the CBDT notification, these new rules will be effective from December 5 and will ensure proper tax payment from all citizens.
Other than these, any resident entities will also need to issue PAN cards, even if their total sales/ turnover/ gross receipts do not exceed Rs 5 lakh annually. Also, top officials of companies like managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of the person, or any person competent to act on behalf of the person referred are required to have a PAN card before commence of the next financial year. This will allow the government to have a clearer look into financial transaction and broaden tax and prevent tax evasion.
While making PAN card application, mentioning of father’s name of the applicant will be mandatory for all, unless the mother of the applicant is a single parent. All these PAN card related rules will come into effect from December 5 under the power of section 139A read with section 295 of the Income-tax Act, 1961 (43 of 1961), and the CBDT said that “these rules may be called the Income-tax (Twelfth Amendment) Rules, 2018.”