CBDT puts on hold changes in application process for PAN

Feb 04 2014, 12:49 IST
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SummaryCentral Board of Direct Taxes proposed certain changes in the application process for a Permanent Account Number.

On January 24, the Central Board of Direct Taxes (CBDT) proposed certain changes in the application process for a Permanent Account Number (PAN). These changes were supposed to take effect from February 3.

As per the proposal, the applicant would be required to furnish self-attested copies of proof of identity, address and date of birth, along with the PAN application. Additionally, he would have to produce original documents at the PAN facilitation centres, which would be returned after verification.

However, a couple of days later, the finance ministry put the new norms on hold. The existing procedure will now continue. The proposed changes were meant to validate the authenticity of the taxpayer vis-à-vis the documents provided and to curb fake and multiple PAN by a single applicant. However, due to a lack of guidance by CBDT on certain aspects, it was feared that the changes would make the process a tedious one.

PAN is required for a host of reasons, including tax filing, bank transactions, property transactions, etc, and an applicant could be based at a location in and outside India. To facilitate allotment of PAN, the process was simplified in the recent past with the introduction of the online facility: The applicant would send the acknowledgement generated — along with relevant documents — to the centralised PAN facilitation centre for completion of the process.

The requirement of “original” documents could lead to a lot of challenges as there were no guidelines from the CBDT on applications made online. Also, applicants based in locations with no facilitation centres would suffer. This would have especially impacted applicants based in foreign countries. Realising that the new procedure would create practical difficulties, the CBDT decided to keep the circular sent to PAN facilitation centre for implementation of the new procedure in abeyance till further notice.

The writer is senior tax professional, EY. Views expressed as personal.

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