ImDon said:
Hi Ashish,
Thanks for your advice, I'll see to it that I get a PAN as soon as possible. I definately want to know more about why PAN card is a must.
And yeah, I never worked with a US military establishment.
Thanks again for your time.
Well, Here is the answer:
Under section 139A of the Income Tax Act, Every person who is required to furnish any return u/s. 139 or whose total income is in excess of the amount chargeable to tax is required to obtain a PAN No.
It means, any person whose total income during the previous year exceeded Rs. 1,00,000 will have to obtain a PAN no. Now, as the income from trading in securities on Indian Stock exchanges has source in India, it's taxable in the hands of every trader irrespective of his residential status.
Assuming that the person in question will have profit in excess of Rs. 1,00,000obtaining a PAN becomes mandatory. Even if a loss is suffered by the person, he can't claim set-off of that loss against profits arising in next year untill he has filed a return of Loss during the previous year.
Hence, it becomes advisable to obtain PAN no. as no return can be filed without quoting the PAN no.
A plain reading of the abovequoted provisons makes it appear that a person who has a positive income in the range of Rs. 1-1,00,000 is not required to get a PAN no.
But here comes section 139(5A) which stipulates that Every person receiving any sum or income or amount from which tax has been deducted under the provisions of Chapter XVIIB, shall intimate his permanent account number to the person responsible for deducting such tax under that Chapter.
Summing up, a PAN no. is required for a person:
1. If he is required to file an ITR.
2. If he has a -ve income and he wants to claim set-off of loss in the future.
3. If he enters into any transaction which are subject to TDS/ TCS (Tax Collection at source)
Hope this info. is useful.
Best Regards,
--Ashish