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Document on which PAN required to be quoted

PAN should be quoted on all:

  1. Income-tax / TDS / TCS Returns,
  2. Correspondence with tax department,
  3. Tax challans,
  4. Correspondence, bills, vouchers and other documents which are send by deductee of tax to deductor,
  5. Documents pertaining to prescribed transactions
    • Sale & purchase of immovable property valued Rs 500,000 or more
    • Sale & purchase of motor vehicle other than two wheelers
    • Time deposits with bank or banking institution exceeding Rs 50,000
    • Any deposits exceeding Rs 50,000 with post office
    • Purchase or sale of securities contract exceeding Rs 100,000
    • Opening account with bank or banking institution, PAN of father or mother or guardian can be quoted, in case minor’s account.
    • Application for installation of landline/mobile telephone connection.
    • Payment of bill exceeding Rs 25,000 to hotel and restaurants.
    • Payment in cash for purchase of bank draft, pay order to bank or banking institution aggregating of Rs 50,000 or more, during any one day,
    • Deposit of cash with bank or banking institution exceeding aggregate of Rs 50,000 or more during any one day,
    • Payment in cash in connection with travel (including fare, purchase of foreign currency from authorised person) to any foreign country of an exceeding Rs 25,000 at any one time. However foreign travel does not includes travel to neighbouring countries viz. Bangladesh, Bhutan, Maldives, Nepal, Pakistan, and Sri Lanka, places of pilgrimages viz. Saudi Arabia, on Haj Pilgrimage organised by the Central HAJ Committee and China on pilgrimage to Kailash Mansarovar organised by the Ministry of external Affairs, GOI.
    • Application to bank or other company/institution for issue of credit/debit card.
    • Payment of Rs 50,000 or more to a mutual fund for purchase of units
    • Payment of Rs 50,000 or more to a company for acquiring shares issued by it,
    • Payment of Rs 50,000 or more to a company or institution for acquiring bonds, debentures issued by them
    • Payment of Rs 50,000 or more to a RBI for acquiring bonds issued by it.
    • Payment of an life insurance premium amount aggregating Rs 50,000 or more in a year to an insurer
    • Payment to the dealer, of an amount of Rs 500,000 or more, or against bill of an amount of Rs 500,000 or more, against purchase of bullion or jewellery.
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Procedure for filing eTDS/TCS Returns with Insufficient Deductee PAN

Finance Act, 2003 amended section 206 of Income Tax Act, 1961 to make it mandatory for corporate deductors to furnish their TDS returns in electronic form (eTDS returns). The scheme for furnishing TDS return in electronic form was notified by the Central Board of Direct Taxes (CBDT) vide Notification No. 205/2003 dated August 26, 2003.

Finance Act, 2004, further amended section 206 of the Income Tax Act, 1961, making it mandatory for government deductors also to furnish e-TDS returns from F.Y. 2004-05. E-TDS returns are to be prepared in accordance with the data structure (file format) specified by Income Tax Department (ITD).

Income Tax Department vide its notification no. 238/2007 dated August, 2007 amended Rules 31A of the Income Tax Rules, 1962 to provide mandatory electronic filing of TDS return in respect of following cases :

1. Deductors required to get accounts audited u.s. 44AB in the immediately preceding financial year.
2. Deductors having number of deductee records in a quarterly return for any quarter of the immediately preceding financial year more than or equal to 50.

How do I file my quarterly e-TDS/TCS return, if I don’t have PANs of all deductees?

Ans.: You can file your eTDS/TCS return for the deductees who have valid PANs and subsequently file correction return for remaining deductees whose PANs were not available with you while furnishing regular return.

How do I include deductees whose details were not provided earlier due to unavailability of PAN?

Ans.: You are required to file a correction return in a prescribed file format available at www.tin-nsdl.com

What amount should be mentioned in the challan details in case a regular return is filed only for those deductees whose PAN is present and subsequently a correction is filed with the remaining deductees?

The amount deposited vide that particular challan should be mentioned in the original as well as correction return.

Example:

  • Suppose a challan payment of Rs.1,00,000/- has been made for non-salary TDS against 100 deductees each with TDS of Rs.1,000/-. Under the existing procedure the deductor will have to quote at least 85 PAN failing which his return will be rejected.
  • If there are only 50 deductees whose PAN is available and the deductor attempts to file a return with details of 100 deductees with PAN of only 50 deductees, the return will automatically be rejected at present.
  • However, if he files a return with challan amount of Rs. 1,00,000/- and with details of 50 deductees with PAN, with deductee total of Rs.50,000/-, the return will be accepted. It means the deductor can furnish the details relating to such deductees whose PANs are available.
  • The deductor can later file correction returns with other details of remaining deductees with the same challan details, i.e., the challan amount should be the amount deposited (in this case Rs. 1,00,000/-).
  • The return will be accepted so long as the TDS total of incremental deductees is less than or equal to the balance of Rs.50,000/-.

Permanent Account Number of Deductee

In case valid PAN of a deductee is not available, the deductor should mention the details as under :

PANAPPLIED - in case deductee does not have a PAN but has applied and provided proof of application of PAN.

PANNOTAVBL - where deductee has not given any PAN or proof of PAN application. This means PAN is not available.

PANINVALID - where deductee has provided PAN but it is structurally invalid.

The Deductee PAN field should contain a structurally valid PAN or PANAPPLIED or PANNOTAVBL or PANINVALID only. If any other value is mentioned in this field then the FVU will give an error during validation of the TDS return.

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Mandatory Quoting of PAN and TAN on TDS Certificate for AY: 2014-15

Section 203A of the Act makes it obligatory for all persons responsible for deducting tax at source to obtain and quote the Tax deduction and collection Account No (TAN) in the challans, TDS-certificates, statements and other documents. Detailed instructions in this regard are available in the department’s Circular No.497 [F.No.275/118/ 87-IT(B) dated 9.10.1987]. If a person fails to comply with the provisions of section 203A, he will be liable to pay, by way of penalty, under section 272BB, a sum of ten thousand rupees. Similarly, as per Section 139A(5B), it is obligatory for persons deducting tax at source to quote PAN of the persons from whose income tax has been deducted in the statement furnished u/s 192(2C), certificates furnished u/s 203 and all statements prepared and delivered as per the provisions of section 200(3) of the Act.

All tax deductors are required to file the TDS statements in Form No.24Q (for tax deducted from salaries). As the requirement of filing TDS certificates alongwith the return of income has been done away with, the lack of PAN of deductees is creating difficulties in giving credit for the tax deducted. Tax deductors are, therefore, advised to procure and quote correct PAN details of all deductees in the TDS statements for salaries in Form 24Q. Taxpayers are also liable to furnish their correct PAN to their deductors. Non-furnishing of PAN by the deductee (employee) to the deductor (employer) will result in deduction of TDS at higher rates u/s 206AA of the Act.

Compulsory Requirement to furnish PAN by employee (Section 206AA):

Section 206AA in the Act makes furnishing of PAN by the employee compulsory in case of receipt of any sum or income or amount, on which tax is deductible. If employee (deductee) fails to furnish his/her PAN to the deductor , the deductor has been made responsible to make TDS at higher of the following rates:

  1. at the rate specified in the relevant provision of this Act; or
  2. at the rate or rates in force; or
  3. at the rate of twenty per cent.

The deductor has to determine the tax amount in all the three conditions and apply the higher rate of TDS. However, where the  ncome of the employee computed for TDS u/s 192 is below taxable limit, no tax will be deducted. But where the income of the employee computed for TDS u/s 192 is above taxable limit, the deductor will calculate the average rate of income-tax based on rates in force as provided in sec 192. If the tax so calculated is below 20%, deduction of tax will be made at the rate of 20% and in case the average rate exceeds 20%, tax is to deducted at the average rate. Education cess @ 2% and Secondary and Higher Education Cess @ 1% is not to be deducted, in case the tax is deducted at 20% u/s 206AA of the Act.

 

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