As per the amendment effected in rule 114 of the Income tax rules, non-individuals who till now do not have a PAN and undertake a financial transaction over Rs. 2.5 lakh in a year, need to now obtain PAN mandatorily by May 31, 2019.
The new amendment comes into effect from December 5 of this year. Further the requirement is in force from the new financial year 2018-19.
A Chartered Accountant with Taxmann says in a business daily report, "Application for allotment of PAN and its time limit is provided for under income tax rules. However such rule didn't provide any time limit for making an application to obtain PAN by re resident non-individuals entering into transactions of Rs 2.5 lakh or above in a financial year. The Central Board of Direct Taxes (CBDT) has amended the rule 114(3) to notify the time period for applying for PAN as on or before May 31 of the following financial year."
The situation is as though say an HUF is not required to file the income tax return just because the income falls below the taxable limit then for the threshold transaction value specified now, from this financial year onwards, you need to apply for a PAN.
Also, in other cases where individuals who can function as a non-individual at some places, there also there is a need to apply for PAN until May 31, 2019.