Is PAN necessary for senior citizens without taxable income?

Tax Forum: Questions & Answers
PAN: ordeal for taxpayers
QUESTION: I am writing this provoked by your answer titled “Is PAN necessary for senior citizens without taxable income?” in The Hindu, Kochi Edition dated September 27, 2010.

I shall elaborate with a live example. My mother, a widow, aged 82, is drawing a family pension averaging Rs.85,000 annually. Recently, due to pay revision based on one-rank-one-pension as per the rules of the Kerala State, she received arrears of pension in one lump sum in March 2010 covering past four years.

On availing benefit of spreadover under Sec. 89, her total income for the years did not exceed the income tax exemption limit. Since she did not have a PAN (Permanent Account Number) number, State Bank of India, through which her pension is being disbursed, promptly deducted income tax during the last week of March 2010. She had no time either for applying for PAN nor did she have any intimation to the effect that TDS was being deducted. By the time she obtained her PAN number, deduction was already made and the TAN return was submitted by the bank without inserting PAN. When she went to submit her income tax return before July 31, the income tax authorities declined to accept the return for want of PAN. Now after obtaining PAN, the return has been accepted. Since the bank had already furnished its return without the PAN number, in all probability, the refund claim will not get any matching entry with the income tax authorities. What will be the plight of these elderly citizens, who for no fault of theirs, are penalised due purely to the proverbial red tapism and ways of bureaucracy. There will be scores of such people whose little income like interest on deposits and their hard earned pension, have been subjected to such TDS without giving them sufficient time to get PAN number, which is practically of no utility for them other than avoiding TDS.

ANSWER: The ordeal of taxpayers relating to the requirement of PAN in the above letter is aired by the reader, Gerard K. John, retired Assistant General Manager of State Bank of India, Kochi, in respect of his mother's case.

The difficulties as stated above cannot possibly be avoided for one reason or the other, but the situation can be remedied by expediting refund by setting right AS 22 at the earliest opportunity on the basis of PAN details subsequently received.
S. RAJARATNAM
PAN: ordeal for taxpayers