The Income Tax department, working under the Union Finance Ministry, has introduced wide-ranging changes to PAN card rules that will help the government to prevent tax evasion and provide greater flexibility to new applicants, as reported by Mint.
Permanent Account Number (PAN) is an electronic system that through all tax-related data of an individual or a corporate entity is recorded under a single number. A PAN is issued to anyone (including NRIs) who pays taxes in India.
These changes which issue from an amendment to the Income Tax Rules, 1962, will come into force on Wednesday (5 December 2018). The new rules state that every entity which undertakes financial transactions over Rs 2.5 lakh in a fiscal year, will have to get a PAN mandatorily till 31 May of the next fiscal year.
This rule will be applicable to not only individual taxpaying entities (persons and companies) but also those who are associated with such entities in the capacity of a managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office-bearer or any person competent to act on behalf of the entity.