Section 139A of ITA, 1961 : Section 139A: Permanent Account Number

Explanation using Example

Imagine a scenario where Mrs. Sharma is a freelance graphic designer. In the previous financial year, she earned a total income of INR 7,50,000 from various clients. According to Section 139A of the Income-tax Act, 1961:

• Since her income exceeds the maximum amount not chargeable to income tax, she is required to apply for a Permanent Account Number (PAN) if she has not done so already.
• She must quote her PAN on all her tax returns, correspondence with the tax authorities, and in any financial transactions specified by the Board that are relevant for tax purposes.
• If Mrs. Sharma decides to hire an employee and provide fringe benefits, as an employer, she would need to furnish a return of fringe benefits and would require a PAN for that purpose as well.
• In case Mrs. Sharma's business grows and she starts importing or exporting goods, the government may specify by notification that as an importer or exporter, she must apply for a PAN even if no tax is payable by her at that time.
• If she moves her residence or changes the nature of her business, she needs to inform the Assessing Officer of these changes, as her PAN was allotted based on her previous address and business details.

Furthermore, if Mrs. Sharma deducts tax at source for any payments she makes, she needs to quote the PAN of the recipient in all relevant documents like TDS certificates and returns.