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March 24, 2000

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Do you need to file a return?

Larissa Fernand

Trying to figure out if you need to file a return? Need to know if you fall under the 'one-by-six' scheme? Want to know what a PAN is? Read on.

Understanding the 'one-by-six scheme'?

Section 139 (1) of the Income Tax Act, 1961, requires every individual, whose total income exceeds the maximum amount which is not chargeable to tax, to file a return. That means, only those individuals whose annual income is less than Rs 50,000 are bypassed. However, if the person fulfills any of the conditions mentioned below, he is obligated to file a return.

  • Ownership/ lease of a motor vehicle
  • Occupation of certain specified categories of immovable properties (ownership, tenancy or otherwise)
  • Foreign travel to a country (excluding pilgrimage to holy places in Saudi Arabia and China), other than Bangladesh, Bhutan, Maldives, Nepal, Pakistan and Sri Lanka
  • Subscription of a telephone
  • Holder of a credit card (not being as "add-on" card) issued by a bank or an institution
  • Member of a club where the entrance fee charged is Rs 25,000 or more
If an individual is 65 years old or more, and not engaged in any business or profession, he is not subject to immovable property and telephone conditions.

When does a salaried individual have to file his return?
A salaried individual has to file his returns on or before June 30 of the relevant assessment year. If a person fails to file his return of income by that period, he can file a belated return under section 139 (4) of the Income Tax Act, at any time before one year from the end of the assessment year or before the assessment is completed, whichever is earlier.

If you are not filing the return or belated return within the time allowed, you will be treated as an assessee in default, irrespective of the fact that TDS is deducted from your salary.
Not furnishing a return of income is not a crime, but attracts penal interest and penalty under section 234A and 271F of the Income Tax Act, 1961.

Who needs a Permanent Account Number?
That bring us to the Permanent Account Number (PAN). The latter is an alphanumeric combination of 10 characters allotted by the Income Tax Department and issued in the form of a laminated card. The PAN is ultimately meant to supplant the General Index Register (GIR) Number which is currently in use.
An individual would have to be in possession of one, if he fulfills the criteria mentioned below.

  • An assessee whose income exceeds Rs 50,000
  • An individual carrying on a business or profession whose total sales, turnover or gross receipts are (or are likely to exceed) Rs 5,00,000
  • An individual who is required to furnish a return of income for income derived from property held under trust or other legal obligation wholly for charitable or religious purposes
  • If you fall under the one-by-six scheme where it is mandatory to file a return
How should one apply for the PAN?
So you figured that you do need a PAN. The procedure for application of one is quite simple. Obtain Form No 49A from the Income Tax office and fill it up. You will have to submit it at the ward where you will be assessed since PAN applications are to be made to the assessing officer having jurisdiction to asses the applicant. Don't forget to submit with two black-and-white photographs along with the applcation.

When do I have to quote the PAN?
When filing your returns, in all 'challans' for payment of direct taxes and in any other correspendence with the Income Tax authority. There are other transactions too which need the PAN to be quoted.

  • Sale or purchase of immovable property valued at Rs 5,00,000 or more
  • Sale or purchase of motor vehicle other than two wheeler
  • Application for installation of telephone connection (including a cellular telephone)
  • Opening an bank account
  • Time deposit exceeding Rs 50,000 with a bank
  • Deposits exceeding Rs 50,000 in an account with a Post Office Savings Bank
  • Contract of a value exceeding Rs 1 million for sale or purchase of securities (shares, debentures)
  • Payment to hotels and restaurants against their bills for an amount exceeding Rs 25,000 at any one time
What should I do if I have not yet received the PAN?
In all cities, there is a central office in the Income Tax Department which is in charge of allotting these numbers. You will have to approach that cell. You can start by contacting the public relations officer of the Income Tax Department and ask for the address of the PAN cell.

A duplicate PAN card can be issued when the PAN card has been lost or misplaced. This could be when the assessee has not received the PAN card from the department, even after the department has despatched it or there is an error in the PAN card issued to the assessee owing to wrong or incorrect information furnished by the assessee/applicant while filling Form 49A or due to subsequent change of name or other details.

In case of reported loss of PAN card by the assessee, a copy of the First Information Report (FIR) filed with the police should be obtained before processing the request for issue of a duplicate PAN Card.

In case the assessee claims that the PAN Card, despatched by the tax department, has not been received, an affidavit to this effect may be obtained from the assessee for providing a duplicate PAN Card.

Assume you made the PAN application in one place, say new Delhi, and then got transferred on business to another city, say Bangalore. Since you had made an application while you were in New Delhi, the official letter intimating the PAN will be sent by the Income-tax Department to your New Delhi address.
Since you will be filing your returns in Bangalore, it would be advisable for you to write a letter to the PAN Cell, Bangalore, intimating to them the fact that you have already applied for the PAN at New Delhi and that now you are going to be assessed at Bangalore.
Attach a photocopy of the said application to the letter and request them to allot the number to you.

An individual must intimate his assessing officer as to any change in the name, address or the nature of the business on the basis of which the PAN was allotted.

Which form is relevant when filing your returns?

There are two factors that go into determining the applicable form for filing your return of income. One is the type of income that comprises your total income. The second is your net total income for the year.
To be more precise, you may determine the form applicable to you from the following:

FORM: 2A or 2D ['Saral']
SOURCE OF INCOME: All income except business income.
INCOME LIMIT: Net total income should not exceed Rs 2,00,000 during the year.

FORM: 3 or 2D ['Saral']
SOURCE OF INCOME: All income except business income.
INCOME LIMIT: Total income for the year is above Rs 2,00,000.

FORM: 2 or 2D ['Saral']
SOURCE OF INCOME: Total income includes business income.

You can get these forms from any Income Tax office falling under the jurisdiction of the area in which you stay, you may even get these forms from some specialised stationery shops. After ascertaining the form applicable to you, you shall have to fill the relevant details on the form.

Also see: Facts on filing of returns

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