You could lose as much as 20% without a PAN

By | October 9, 2012

We’ve repeated this so often – Get yourself a PAN card if you wish to make the most of your financial transactions in India. Here, we present a brief on a news item of the month of January, 2010. This news piece effectively captures the essence of having a PAN card in India. The Government of India sent a notification in the initial months of 2010, saying that a tax of 20%, or the prescribed rate, whichever of the two was higher, would be levied on all transactions of individuals liable to TDS with no PAN card available. The new provision was to come into effect from April 1, 2010, and the notification created a lot of buzz in the country.

All assesses have to quote a PAN with their bills and vouchers, including documents exchanged in financial transactions. The finance ministry already made it clear that deductees should be encouraged to furnish their PAN details so that deductors did not face any hassles, otherwise their deductees would have to bear a higher TDS rate. Also, even non residents have to comply with the instructions of the notification in all payments that are liable to TDS. The ministry said that those without PAN should apply for the same before 31st March, 2010, so that they did not have to pay bear high TDS deduction rate. Also, the notification meant that deductees could not get ‘no tax liability certificates’ issued from assessing officers if they did not have a PAN.

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