Importance of PAN – Permanent Account Number

PAN or Permanent Account Number is a 10 digit code issued by the Income Tax department to every assessee. For specified transactions every person has to quote his or her permanent account number ( PAN ) compulsorily according to a new rule 114. Under new series Permanent Account Number or PAN is an all India unique number of 10 digits which remains unchanged even in case of change of your address, station or your assessing officer.

To widen the tax net the requirements to obtain and quote PAN has been amplified. For filing Income Tax returns 1/6 scheme has been abolished from 1st April 2006. Only those persons are required to file Income Tax returns whose income exceeds the maximum limit of taxable income.

To get a Permanent Account Number ( PAN ), According to section 139A the assesses have to make an application in form NO 49A in duplicate.

Why PAN (Permanent Account Number) is Necessary.

Every person earning total amount more than taxable limit should obtain a PAN.

A person should obtain a PAN if he is liable to file a return of income under section 139 (4A).

By employer, who is required to file a return of fringe benefits u/s 115WD.

A businessman or a professional should obtain a PAN, if his total sales/turnover or gross receipts are more than Rs.5 lakhs.

According to rule for the following transactions every person has to quote his PAN in all the documents:

When any immovable property valued Rs.5 lakhs or more is sold or purchased.

For the registration of a motor vehicle if required, during sale or purchase on demand of registration officer.

To open a bank account.

To apply for telephone/cellular phone connection.

To pay the bills of hotel and restaurants amounting more than Rs.25, 000 at a time.

For time Deposit account with banks or post offices more than Rs.50, 000.

To pay in cash for foreign travel amounting Rs.25, 000 or more at a time.

A deposit more than Rs.50, 000 in one day in any bank.

To purchase bank drafts, pay orders/bankers cheque on cash payment of more than

Rs.50, 000/- in one day.

For sale or purchase of securities on contract valued more than Rs.1 lakh according to section 2(h) of Securities Contracts (Regulating) Act, 1956.

On declaration under Form No. 60/61 any one can open a bank account or make any deposits in the bank or enter into other above mentioned transactions without having a PAN.

Quoting a wrong PAN (Permanent Account Number) will bring you a penalty of Rs. 10,000/- u/s 272B (2)

Government to Implement Direct Tax Code for 2011

Government of India proposed relief for individuals, companies that pay minimum alternate tax. (MAT to be computed on the basis of book profits) and entities using the provisions of the double taxation avoidance agreements in the revised draft of the Direct Taxes Code.

The New Income Tax Code where the new slab of 10 % tax upto 10 lakhs income is not an attractive proposal.

To understand about Direct Tax code, India wants to modernize its direct tax laws, mainly its income tax act which is nearly fifty years old.  So government wants a modern tax code in step with the needs of an economy which is the third largest economy in ASIA. The budget has estimated about USD 92 Billion in direct Tax receipts for the year that ends in March 2011.

According to new tax code the Tax Slabs are

Tax for income between Rs 2 Lakhs to Rs 5 Lakhs – 10 %.

Tax for income between Rs 5 lakhs to Rs 10 Lakhs – 20 %

Tax for income over Rs 10 Lakhs – 30 %

Under new Tax Code:

1. HRA is taxable.

2. Interest paid on Housing loan is not exempted.

3. Medical reimbursement, LTA are taxable.

4. EPF, Leave encashment and gratuity when u retire are taxable

5. Difference between long-term and short-term capital gains eliminated.

6. Buying or selling of securities by FIIs to be charged capital gains.

7. FIIs not to be subjected to TDS will pay advance tax

According to new proposed tax code there will be more burden on some foreign institutional investors (FIIs), as the revised draft said any income arising through sale and purchase of securities will be taxed under capital gains. At present, it is treated as Business income of a foreign company and exempted from tax.

In a bid to check tax avoidance, the government of India also proposed to tax profits of overseas subsidiaries of Indian companies – whether distributed or not by way of dividend in India. In addition, it has addressed some of the concerns on foreign companies that are not residents of India.

Non-profit organizations can draw some comfort as income from public religious activities will be exempt from tax if they fulfill certain conditions.

Due to this new Direct Tax Code choices are that U will pay more tax when u earn and u will pay tax again when u retire.One of the key aims of the new tax code is to provide a system which takes into account increased cross border mergers and acquisitions by Indian corporates over the last few years. The new code is also expected to streamline tax rates and administration for foreign institutional investors, for whom India is a top destination

The limit for tax exemption for salaried people is Rs 2 Lakhs, where as for senior citizens the limit is upto 2.5 lakhs. Corporate tax has been kept at 30 %.

The government plans to implement DTC from April 2011.

Mother Teresa Biography

Mother Teresa – The Nun with an unforgettable touch. Mother Teresa was a soul filled with the light of Christ, on fire with love for Him and burning with one desire: “to quench his thirst for love and for souls.”  Mother Teresa, a strong and independent woman was born Agnes   Gonxha Bojaxhiu in Skopje, Yugoslavia, on August 26, 1910 to Nikola and Drain Bojaxhiu.

Mother was a Catholic nun of Albanian ethnicity and received Indian citizenship, who founded the Missionaries of Charity in Kolkata, India in 1950. Through out her life for more than 45 years she ministered to the poor, orphans, sick and dying while guiding the missionaries of charity’s expansion, first throughout India and then in other countries. After her death Mother Teresa was beautified by Pope John Paul 11 and given the title blesses Teresa of Calcutta.

Mother Teresa’s Missionaries of Charity continued to expand, and at the time of her death it was operating in about 610 missions in 123 countries, including hospices and homes for people with HIV/AIDS, tuberculosis  and leprosy , children’s and family counseling programs, orphanages, and schools.

She also faced a diverse range of Criticism. These include objections by various individuals and groups against the proselytizing focus of her work including a strong stance against contraception and abortion, a belief in the spiritual goodness of poverty and alleged baptisms of the dying. Medical journals also criticized the standard of medical care in her hospices and concerns were raised about the opaque nature in which donated money was spent.

In 1952 Mother Teresa opened the first Home for the Dying in space made available by the city of Calcutta, India. With the help of Indian officials she converted an abandoned Hindu temple into the Kalighat Home for the Dying, a free hospice for the poor. She renamed it Kalighat, the Home of the Pure Heart also called NIRMAL HRIDAY. Those brought to the home received medical attention were afforded the opportunity to die with dignity, according to the rituals of their faith. Muslims were read the Quran, Hindus received water from the Ganges, and Catholics received the Last Rites.

Mother Teresa was internationally famed as a humanitarian and advocate for the poor and helpless. She has been praised by many individuals, governments and organizations.

She won the Nobel Peace Prize in 1979 and India’s highest civilian honor, the Bharat Ratna, in 1980 for her humanitarian work.