Requirement To Furnish Pan – Non-Residents

Author:Ms Karan Gandhi and Minakshi Arya
Profession:Singh & Associates
 
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INTRODUCTION1

At the outset, it is important to mention that the tax may be levied/deducted on the sums, amounts, payments, incomes which are taxable in India.

This article deals with the provisions of Income Tax Act, 1961 dealing with the requirement of allotment of Permanent Account Number to the Non-Residents. According to the provisions of Section 206AA of the Income Tax Act, 1961, any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVII2 shall furnish his Permanent Account Number to the person responsible for deducting such tax. Section 206AA was introduced by Finance (No. 2) Act, 2009 and was inserted in Income Tax Act which came into effect from 1.4.2010. The provisions of 206AA and other provisions of the Income Tax Act 1961 related to the requirement of allotment of Permanent Account Number are dealt hereinafter.

PERMANENT ACCOUNT NUMBER

Section 139A of IT Act reads as follows: Section 139A: Permanent account number:

(1) Every person,—

if his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to income-tax; or carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed five lakh rupees in any previous year; or who is required to furnish a return of income under sub-section (4A) of section 139; or being an employer, who is required to furnish a return of fringe benefits under section 115WD, and who has not been allotted a permanent account number shall, within such time, as may be prescribed, apply to the Assessing Officer for the allotment of a permanent account number. (1A) Notwithstanding anything contained in sub-section (1), the Central Government may, by notification in the Official Gazette, specify, any class or classes of persons by whom tax is payable under this Act or any tax or duty is payable under any other law for the time being in force including importers and exporters whether any tax is payable by them or not and such persons shall, within such time as mentioned in that notification, apply to the Assessing Officer for the allotment of a permanent account number.

(1B) Notwithstanding anything contained in sub-section (1), the Central Government may, for the purpose of collecting any information which may be useful for or relevant to the purposes of this Act, by notification in the Official Gazette, specify, any class or classes of persons who shall apply to the Assessing Officer for the allotment of the permanent account number and such persons shall, within such time as mentioned in that notification, apply to the Assessing Officer for the allotment of a permanent account number.

(2) The Assessing Officer, having regard to the nature of the transactions as may be prescribed, may also allot a permanent account number, to any other person (whether any tax is payable by him or not), in the manner and in accordance with the procedure as may be prescribed.

(3) Any person, not falling under sub-section (1) or subsection (2), may apply to the Assessing Officer for the allotment of a permanent account number and, thereupon, the Assessing Officer shall allot a permanent account number to such person forthwith.

(4) For the purpose of allotment of permanent account numbers under the new series, the Board may, by notification in the Official Gazette, specify the date from which the persons referred to in sub-sections (1) and (2) and other persons who have been allotted permanent account numbers and residing in a place to be specified in such notification, shall, within such time as may be specified, apply to the Assessing Officer for the allotment of a permanent account number under the new series and upon...

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