Breaking News: Income Tax Department’s Sneaky Text – What’s Inside?

Breaking News: Income Tax Department's Sneaky Text - What's Inside?

In recent times, a plethora of taxpayers have reported the reception of an SMS from the Department of Revenue, containing the subsequent contents: “The Revenue Department has obtained information regarding specific transactions as reported by you in Form 60/61 pertaining to Fiscal Year 2021-22. It is earnestly requested that if you do not possess a PAN number, you promptly apply for one using Form 49A, or alternatively, submit the PAN Number to the Reporting Entity within a fortnight from the initiation of this campaign. -Department of Revenue.”

As verified by a report in the Economic Times, the official Twitter account of the Department of Revenue has authenticated the authenticity of this SMS, confirming its origin from the department itself. To decipher the reason why taxpayers are receiving this SMS and the significance of Form 60, let us undertake a thorough exploration.

What exactly is Form 60? Normally, individuals are required to provide their Permanent Account Number (PAN) for various financial dealings. However, if an individual lacks a PAN, they are required to furnish Form 60 instead.

Why are individuals receiving this SMS? As explained by Gopal Bohra, a Partner at N.A. Shah Associates, a Mumbai-based Chartered Accountancy firm, individuals who lack a PAN but engage in certain financial transactions will receive this SMS.

In this context, “specified transactions” refer to transactions where furnishing a PAN is compulsory. Rule 114B mandates that taxpayers without a PAN must provide a declaration in Form 60 to the relevant reporting entity when engaging in any of the 18 specified financial transactions enumerated in the rule. These transactions encompass activities such as the sale or purchase of motor vehicles, immovable properties, or shares not listed on recognized stock exchanges.

Chartered Accountant Divakar Vijayasarathy, the Founder and CEO of DVS Advisors, a tax advisory firm located in Chennai, elucidates that when an individual submits Form 60 to a reporting entity (for instance, a bank), due to the absence of a PAN, the reporting entity then submits Form 61 to the Revenue Department. Form 61 encapsulates the information provided in Form 60. Upon receiving this information, the Revenue Department dispatches an SMS to the individual who undertook the transaction without providing a PAN.

How should recipients react to this SMS? Tax experts posit that there are two plausible reasons for receiving this SMS. Firstly, the recipient may have genuinely submitted Form 60 for specific transactions. Secondly, someone might have illicitly employed the recipient’s details in Form 60 to evade providing a PAN. In either scenario, recipients should take appropriate measures. If they did indeed conduct transactions without a PAN, they should promptly initiate an application for a PAN using Form 49A. If they suspect unauthorized usage of their details, they should communicate with the Revenue Department to rectify the situation.

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