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CMA Intermediate · Direct and Indirect Taxation · PAN

Sri Lakshmi Charitable Trust, a resident non-individual without a PAN, enters into financial transactions aggregating Rs. 2,75,000 in a tax year. Under section 262(1), which statement is correct?

The Trust must apply for PAN because it is a resident non-individual with financial transactions of Rs. 2,50,000 or more. Section 262(1)(e) also requires its trustees, office bearers and persons competent to act for it to apply.

  1. AOnly the Trust must apply for PAN; its trustees have no obligation
  2. BThe Trust must apply for PAN, and its trustees and office bearers must also apply as persons referred to in clause (e)Correct
  3. CNo one needs to apply because the limit applies only to companies
  4. DThe Trust need not apply because the transactions are below Rs. 5,00,000

Explanation

Clause (d) covers a resident non-individual with financial transactions aggregating Rs. 2,50,000 or more; Rs. 2,75,000 qualifies. Clause (e) extends the requirement to its trustee, director, partner, office bearer and persons competent to act on its behalf. The Rs. 5,00,000 limit applies only to business turnover under clause (b).

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