P A R Y & Co
 
P A R Y & CO
 
 
PROFESSIONAL SERVICES

FAQ

INCOME TAX

1.What is meant by an assessee?
Assessee means a person by whom any tax or any other sum of money is payable under the Income Tax Act, and includes -

every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or of the income of any other person in respect of whom he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person;

every person who is deemed to be an assessee under any provision of this Act.

every person who is deemed to be an assessee in default under any provision of this Act.

2.Who must file the Income Tax returns?
Every person, if his total income or the total income of any other person, in respect of which he is assessable under the Income Tax Act, during the previous year, exceeds the maximum amount which is not chargeable to tax, is required to furnish a return of his income or, the income of such other person, voluntarily.

This provision applies to all persons whether they are resident or non-resident. A person shall submit his return of income in form 2 C if he fulfills any one of the following conditions at any time during the previous year:
  1. Ownership/lease of a motor vehicle other than a two wheeled motor vehicle, with or without a side car and/or extra wheel attached.

  2. Occupation of any category/categories of immovable property as may be specified by the board by notification whether by way of ownership or tenancy or otherwise;

  3. Incurred expenditure on Foreign travel to a country other than Bangladesh, Bhutan, Maldives, Nepal, Pakistan or Sri-Lanka;

  4. Subscription of a cellular telephone not being a wireless in local loop telephone;

  5. Holder of a credit card, issued by a bank or an institution;

  6. Member of a club where entrance fees charged is Rs. 25,000 or more.
Therefore, it follows that any person, who fulfills any one of the above conditions, would be liable to file his returns.

3.Who is a "person" as defined under the Income Tax Act?
Section 2(31) of the Income Tax Act defines a person. The definition includes
  1. An individual
  2. A Hindu Undivided Family
  3. A Company
  4. A Firm
  5. An Association of Persons or a Body of Individuals whether incorporated or not
  6. A Local Authority
  7. Every artificial juridical person not falling within any of the preceding categories.

4.What is the procedure if the last day for filing returns is a holiday?
Where the last day for filing returns is a day on which the office is closed, the assessee can file the return on the next day that the office is open. In such cases, the returns will be considered to have been filed within the specified time limit.

5.What are the Heads under which Income-Tax is chargeable?
Income-Tax is chargeable under the following heads namely:

  • Income from salaries
  • Income from House Property
  • Profits and gains of business or profession
  • Capital Gains
  • Income from other sources.

6.Do I need to submit a tax return even if I have no taxable income?
Yes, you need to submit a tax return even when you do not have the taxable income. Nobody can escape filing a tax return sooner or later.

7.If I do not have a PAN number will I get into trouble if I file a return?
No. You will get into trouble if you do not file a return. You will also get into trouble if you have not applied for a PAN if you meet any of the criteria that make it mandatory for you to have a PAN. It is best that you file your return and apply for a PAN immediately if you have not done so already.

8.What is PAN?
Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by an Assessing Officer of the Income Tax Department.
A typical PAN is AFRPP1595D

9.What is the purpose of having a Permanent Account Number (PAN)?
It is mandatory to quote PAN on return of income, all correspondence with any income tax authority and challans for any payments due to Income Tax Department.

It is also compulsory to quote PAN in all documents pertaining to economic or financial transactions notified from time-to-time by the Central Board of Direct Taxes.

Likewise, PAN has to be mentioned for making a time deposit exceeding Rs. 50,000/- with a Bank or Post Office or depositing cash of Rs. 50,000/- or more in a Bank.

10.Who must have a PAN?

  1. All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others, must obtain PAN.

  2. Any person, who intends to enter into economic or financial transactions where quoting PAN is mandatory, must also obtain PAN.

  3. The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.

11.Who are those persons who are not required to obtain or quote Permanent Account Number?
The following categories of persons are not required to obtain or quote PAN:

  1. Persons having only agricultural income and do not have any taxable income. Such persons will file a declaration (Form 61) in respect of transactions where quoting of PAN is mandatory;

  2. Non-residents;

  3. Central Government, State Governments and Consular Offices in transactions in which they are the payers.

12.How to apply for a PAN? Can an application for PAN be made on plain paper?
PAN application can be made only on new Form 49A that may be obtained from IT PAN Service Center at a cost of Rs. 5/- per form.

13.What documents and information have to be submitted along with the application for Form 49A?

  1. Individual applicants will have to affix one recent, coloured photograph (Stamp Size: 3.5 cms x 2.5 cms) on Form 49A;
  2. Any one document listed in Rule 114 must be supplied as proof of Identity and Address; and
  3. Designation and code of the concerned Assessing Officer of Income Tax department will have to be mentioned in Form 49A.

14.Which documents will serve as proof of Identity?
Copy of school leaving certificate or matriculation certificate or degree of a recognized educational institution or depository account or credit card or bank account or water bill or ration card or property tax assessment order or passport or voter identity card or driving license or certificate of identity signed by a MP or an MLA or a Municipal Councilor or a Gazetted Officer.

15.What is proof of Address?
Copy of electricity bill or telephone bill or depository account or credit card or bank account or ration card or employer certificate or passport or voter identity card or property tax assessment order or driving license or rent receipt or certificate of address signed by a MP/ MLA/Municipal Councilor / a Gazetted Officer;

16.What is the procedure for applicants who cannot sign?
In such cases, Left Hand Thumb impression of the applicant should be affixed on Form 49A at the place meant for signatures and got attested by a Magistrate or a Notary Public or a Gazetted Officer, under official seal and stamp.

17.Is father’s name compulsory for female (including married/divorced/widow) applicants?
Only fathers name is required to be filled in the PAN application (Form 49A). Female applicants, irrespective of marital status, should also write only father’s name in the PAN application.

18.Is it compulsory to mention telephone numbers on Form 49A?
Telephone number is not compulsory, but if provided it may help in faster communication.

19.What if I submit incomplete Form 49A ?
IT PAN Service Centers will assist applicants to correctly fill up form 49A, but shall not receive any incomplete and deficient PAN application.

20.Can a person obtain or use more than one PAN?
Obtaining or possessing more than one PAN is against the law

21.Do you need to apply for a PAN when you move or transferred from one city to another?
Permanent Account Number (PAN), as the name suggests, is a permanent number and does not change;

Changing the address or city, though, may change the Assessing Officer. Such changes must, therefore, be intimated to nearest IT PAN Service Center for required corrections in PAN databases of the Income Tax department.