Know your PAN Structure Meaning of PAN digits (Income Tax India)

Structure of the new series of PAN : The Permanent Account Number under new series is based on following constant permanent parameters of a taxpayer and uses Phonetic Soundex code algorithm to ensure uniqueness :-

i. Full name of the taxpayer;

ii. Date of birth / Date of Incorporation;

iii. Status;

iv. Gender in case of individuals; and

v. Father name in case of individuals (including in the cases of married ladies)

These five fields are called core fields, without which PAN cannot be allotted.

The PAN under the new series is allotted centrally by a customised application system (IPAN / AIS) for all-India uniqueness. The system automatically generates a 10 character PAN using the information in above five core fields.

Structure of PAN

The fourth character of the PAN must be one of the following, depending on the type of assesse:
C  Company
P  Person
H  HUF(Hindu Undivided Family)
F  Firm
A  Association of Persons (AOP)
T AOP (Trust)
B Body of Individuals (BOI)
L Local Authority
J  Artificial Juridical Person
G  Govt

The fifth character of the PAN is the first character (a) of the surname / last name of the person. In the case of Personal Pan card, where the fourth character is “P” or (b) of the name of the Entity/ Trust/ Society/ Organisation in the case of Company/ HUF/ Firm/ AOP/ BOI/ Local Authority/ Artificial Jurdical Person/ Govt, where the fourth character is “C”,”H”,”F”,”A”,”T”,”B”,”L”,”J”,”G”.

Know PAN by Name

The phonetic PAN (PPAN) is a new concept which helps prevent allotment of more than one PAN to assessees with same / similar names. AIS works out the PPAN based on some important key fields of an assessee using an internal algorithm. At the time of PAN allotment, the PPAN of the assessee is compared with the PPANs of all the assessees to whom PAN has been allotted all over the nation. If a matching PPAN is detected, a warning is given to the user and a duplicate PPAN report is generated. In such cases, a new PAN can only be allotted if the Assessing Officer chooses to override the duplicate PPAN detection.

A unique PAN can be allotted under this system to 17 crore taxpayers under each alphabet under each status (i.e. individual, HUF, Firm, Company, Trusts, Body of Individuals, Association of Persons etc.)

Permanent Account Number under new series Since a taxpayer can make payment of taxes or have monetary transaction anywhere in India, a unique all India taxpayer identification Number is essential for linking and processing transactions / documents relating to a taxpayer on computers, as also for data matching. Therefore, a new series of Permanent Account Number was devised . Section 139A of the Act was amended w.e.f. 1.7.95 to enable allotment of PAN under new series to persons residing in areas notified by the Board.Ã…¡ Applications for allotment of PAN under new series was made mandatory in Delhi, Mumbai and Chennai w.e.f. 1.6.96, and in rest of the country w.e.f. 11.2.98.

Objectives sought : PAN was introduced keeping in view the following objectives :-

i.  to facilitate linking of various documents and information, including payment of taxes, assessment, tax demand, arrears etc. relating to an assessee.
ii. to facilitate easy retrieval of information.
iii.  to facilitate matching of information relating to investment, raising of loans and other business activities of taxpayers collected through various sources, both internal as well as external, for widening of tax base and detecting and combating tax evasion through non-intrusive means.

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Revised CBDT Instruction on Grant of TDS Credit For AY 2011-12

Section 143 of the Income-tax Act, 1961  Assessment  General  Processing of returns of A.Y. 2011-12  Steps to clear backlog withdrawal of Instruction No. 1/2012, dated 2-2-2012

Instruction No. 4/2012 [F. No. 225/34/2011-ITA.II], dated 25-5-2012

The Board has decided to withdraw Instruction no. 01/2012 issued on 2nd February, 2012 on the subject above with immediate effect. The following decisions have been taken in this regard:

(i)  In all returns (ITR-1 to ITR-6), where the difference between the TDS claim and matching TDS amount reported in AS-26 data does not exceed Rs. Five thousands, the TDS claim may be accepted without verification.

(ii) Where there is zero TDS matching, TDS credit shall be allowed only after due verification.

(iii)  Where there are TDS claims with invalid TAN, the TDS credit for such claims is not to be allowed.

(iv  In all other cases TDS credit shall be allowed after due verification.

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DEDUCTORS MUST ENSURE CORRECT CREDIT OF TDS IN CORRECT PERSON

Deductors Must Comply with their Obligations to Ensure Correct Credit to Persons from Whose Income Tax is Deducted at Source. All deductors other than Government deductors must file their quarterly TDS statement for the quarter ending 30th June 2012, on or before 15th July 2012 and Government deductors must file their statement on or before 30th July 2012. While submitting their statements, the deductors have to choose correct and relevant form, quote correct PAN against all entries and ensure that correct CIN/BIN is quoted in the TDS statement. Non-quoting of PAN or TAN in TDS statements or delay in filing of TDS statements may lead to levy of penalty.

Filing of TDS statement with correct PAN and CIN/BIN is important because under Rule 37BA of Income Tax Rules, 1962 credit for tax deducted at source is given to the deductees on the basis of TDS statement furnished to the Income-tax Department by the deductor. Filing of TDS statements with incorrect PAN or other details of the deductee would, therefore, cause inconvenience to the deductees (taxpayer).

Income Assessable in others Hands: In case the income on which tax has been deducted at source is assessable in the hands of a person other than the deductee, the deductee must file a declaration with the deductor that credit for the TDS shall be given to the other person and not to the deductee. The declaration filed by the deductee must contain the name, address, Permanent Account Number of the person to whom credit is to be given and reasons for giving credit to such person. The deductor must, in the TDSstatement, report the tax deduction in the name of such other person and also issue the TDS certificate in the name of the person in whose name credit is shown in the TDS statement.

TDS certificates for deductions on income other than salary income (Form 16A) for the quarter ending 30th June 2012 should be issued on or before 30th July 2012.

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NEW FVU 3.5 FILES RELEASED BY TIN-NSDL

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New File Validation Utilities – FVU 3.5 have been released pertaining to validation of eTDS & eTCS returns.

FVU 3.5 will be applicable for quarterly TDS / TCS statements pertaining to FY 2010-11 onwards & FVU 2.132 will be applicable for quarterly TDS / TCS statements pertaining up to FY 2009-10.

Key features of File Validation Utility (FVU) version 3.5:

Changes in the structural validations of Book Identification Number (BIN) quoted in quarterly TDS/TCS statements for TDS/TCS deposits made by Book entry (applicable only in case of Govt. deductors). Deductor can now quote the Date of deduction beyond the quarter.

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