Higher tax for missing Higher tax for missing Chartered Accountant CA ICAI Chartered Accountants CA ICAI CAinINDIA ICAI Announcements Accounting Standards CA News ICAI Students ICAI Members Case Laws CPT IPCC Final ICAI Course CA Course ICAI Forum CA Question Papers ICAI Study Material

« General »

Open DEMAT Account in 24 hrs
Won case against income tax department but still waiting for benefit? No more delay after an update in ITR portal
Income Tax Department regrets issuing erroneous notices to taxpayers: Know the details
Income Tax Return: Miss THIS ITR filing deadline and you will be fined Rs 10000
Tax contribution of petroleum sector set to drop rapidly in FY 2024-25
Missed reporting foreign assets in ITR? File revised return to avoid Rs 10 lakh penalty
Tax regime shift: Is filing ITR under old regime still valid after default new regime?
Income Tax Department Targets Bogus Refund Claims, Issues Notices To Taxpayers
IT firms bullish on higher spending due to tax cuts
How to calculate capital gains tax on sale of land?
Don't fall for fake notices! How to verify your income tax communication
I decided to shift to the new tax regime. Will I lose benefit on interest income of my PPF account?


« Exporters want switchover to turnover tax...	Global accounting respite for SMEs... »
Higher tax for missing

January, 21st 2010
PAN must be quoted in all transactions between two entities that involve a tax deduction at source, failing which the tax deducting entity will impose a 20 per cent levy. The new rule will take effect from the next fiscal, the Central Board of Direct Taxes said in a notification. PAN (permanent account number) is an identification number issued to all entities with taxable income. Transaction is a legal document between two parties such as a rent deed or a gift deed; transaction is not salary. Tax consultants said in most cases the 20 per cent levy was higher than the existing TDS (tax deducted at source) rate. Entities are individuals as well as firms. The deductee (person from whom income tax is deducted) shall mandatorily furnish his PAN to the deductor, failing which the deductor shall deduct tax at source at higher rates, said the Finance Bill for 2009-10. The new rule applies to non-residents as well in respect of payments and remittances that are liable to TDS. Besides, there were no grounds of dispute between entities vis--vis quoting and non-quoting of PAN or its accuracy. The law requires all deductees and deductors to quote PAN in all correspondences, bills, vouchers and other documents sent to each other, the CBDT said in a statement. According to the new provisions, a certificate for deduction at a lower rate or no deduction shall not be given by the assessing officer, if there is no PAN. Besides, declaration by deductee for non-deduction of TDS on payments shall not be valid. All deductors are advised to intimate their deductees to obtain and furnish their PAN to avoid TDS at a higher rate, the statement said. The CBDT has advised entities as well as non-residents engaging in taxable transactions to get PAN by March 31 and communicate the information to the deductors. TDS rates vary depending on the transactions but are lower than 20 per cent. The latest notification is aimed at encouraging better compliance with TDS norms. Faced with a huge budget deficit, the government is pulling out all the stops to increase revenue collections.