DIRECT TAXES
| TDS and Permanent Account Number Mon, 17 May 2010 |
| The Hindu TDS and Permanent Account Number I can well understand tax deduction at 20 per cent, where Permanent Account Number (PAN) is not furnished, but post office says no SCSS account can be opened without the PAN, even if the deposit is well below Rs. 50,000, the income from which does not attract tax deduction at source. They say the computer does not permit opening this account, if the PAN number is not fed into it. This would mean that “small” savings scheme would be out of bounds for small investors, especially from the elderly group. It is one thing to require Permanent Account Number (PAN) for avoiding the punitive rate of tax at 20 per cent for deductors but it is quite another if the deposit itself is not accepted, if PAN is not given. No doubt, KYC (know your customer) norms would have application for all deposits so that the bank or even the post office may require evidence of identity of a depositor but PAN is not the only manner of identification of the depositor. Apparently, PAN is required in the system for working out the rate of tax deduction but it has resulted in rejection of account itself. The postal department should ensure that there is no rejection of an account for absence of PAN, since other identifications should be acceptable to them. State governments, which are beneficiaries and which monitor the small income schemes, should ensure it. Interest income from bank deposits falls below Rs. 10,000. Am I required to file my PAN? PAN is required only for a person who has income exceeding the exemption limit or is in business or profession having turnover or gross receipts likely to exceed Rs. 5 lakh in any year or is a charitable institution covered under Sec. 139(4A) or is a person belonging to a class notified by the Central Government. There is no requirement to apply for PAN, where the income of such persons falls below the limit forrequiring tax deduction at source. |
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