Form No.60 Declaration for Individuals Without a PAN

Under the Income Tax Act, a Permanent Account Number (PAN) is the primary identifier for every taxpayer in India. However, there are situations where an individual may be required to file a tax return or receive a payment but does not possess a PAN. To address such cases, the Income Tax Rules provide Form No.60, a onetime declaration that enables the individual to comply with tax obligations without a PAN.

1. When is Form No.60 Required?

Form No.60 is applicable under the following circumstances:

• Receiving any income or generating a transaction that requires TDS (Tax Deducted at Source) when the recipient does not have a PAN.
• Opening a bank account, demat account, or entering into a financial contract where PAN is normally mandatory.
• Filing an incometax return for the first time, before a PAN is allotted.
• In the case of nonresident Indians (NRIs) or foreign citizens receiving Indian source income without a PAN.

2. Legal Basis

The provision for Form No.60 is found in Rule 31(2) of the Income Tax Rules, 1962. The rule states that a person who does not have a PAN may submit a declaration that includes the following:

1. Name, residential address, and date of birth.
2. A statement that the individual does not possess a PAN.
3. Signature of the declarant.

The declaration must be furnished to the deductor (the party required to deduct tax) before the taxable transaction is effected.

3. Contents of Form No.60

The form is straightforward and consists of three parts:

4. Procedure for Submission

1. Obtain the Form: The form can be downloaded from the Income Tax Departments website or collected from the deductors office.
2. Fill in the Details: Complete all mandatory fields accurately. Any mistake may lead to rejection.
3. Affix a Photograph (if required): Some financial institutions ask for a recent passportsize photograph attached to the form.
4. Submit to the Deductor: Hand over the completed form to the party who is about to deduct tax (e.g., employer, bank, buyer).
5. Obtain an Acknowledgement: The deductor should issue an acknowledgement receipt. Keep it safe for future reference.
6. Apply for PAN (Optional but Recommended): While Form No.60 enables a oneoff transaction, the individual is still advised to apply for a PAN to avoid repeated declarations.

5. Implications of Using Form No.60

When a transaction is processed using Form No.60, the following tax consequences apply:

• TDS Rate: The deductor must apply the same TDS rate that would have been applicable if a PAN were available, but the rate may be higher (typically 5% higher) under Section206AA when PAN is not furnished.
• Higher Tax Deduction: For example, if the normal TDS rate on interest is 10%, the rate without PAN could become 15%.
• Credit Availability: The tax credit can only be claimed after the PAN is allotted and the tax is linked to the PAN.
• Single Use: Form No.60 is valid only for the specific transaction for which it is submitted. A new declaration is required for every subsequent transaction unless a PAN is obtained.

6. Common Scenarios & Examples

6.1 Salary Income for a New Employee

An employee joins a company but has not yet received a PAN card. The employer requests a Form No.60 declaration. The employer withholds tax at the higher rate and later adjusts the amount once the employee receives a PAN.

6.2 Fixed Deposit Interest

A senior citizen opens a fixed deposit with a bank and does not possess a PAN. The bank asks for Form No.60, deducts TDS at 15% (instead of 10%), and later refunds excess tax after the PAN is linked.

6.3 Sale of Property

A buyer purchases a residential plot from a seller without PAN. The buyer obtains Form No.60 from the seller, deducts TDS at 2% (instead of 1%) under Section194-IA, and the seller later applies the credit after PAN issuance.

7. PAN Application Why It Is Preferable

While Form No.60 offers a temporary solution, obtaining a PAN confers several longterm advantages:

• Eliminates higher TDS rates imposed under Section206AA.
• Facilitates smoother processing of bank accounts, credit cards, and loans.
• Enables seamless filing of incometax returns and claim of refunds.
• Reduces the need for repeated declarations for each transaction.

8. Frequently Asked Questions

Q1: Can a minor submit Form No.60?

Yes. The parent or guardian can sign the declaration on behalf of the minor. However, it is advisable to apply for a PAN for the minor as soon as possible.

Q2: Is Form No.60 accepted for capital gains from the sale of shares?

For securities transactions, the depository (NSDL or CDSL) requires a PAN. Therefore, Form No.60 cannot be used; the seller must obtain a PAN before the sale.

Q3: What happens if the declarant later obtains a PAN?

The new PAN should be communicated to all parties that previously received Form No.60. Future transactions will then be processed using the PAN, and any excess TDS can be claimed as a refund.

Q4: Does the declaration have an expiry date?

There is no specific expiry, but it is considered valid only for the transaction for which it was submitted. For new transactions, a fresh declaration (or PAN) is required.

9. Practical Tips for Taxpayers

1. Keep a Copy: Always retain a photocopy of the signed Form No.60 and the acknowledgement from the deductor.
2. Check TDS Certificates: After the transaction, verify that the TDS amount is correctly reflected in Form 16/16A.
3. Track Refunds: If excess TDS is deducted, file the incometax return once PAN is received to claim a refund.
4. Apply for PAN Early: The online application process through NSDL or UTIITSL takes a few weeks; start early to avoid repeated declarations.
5. Use Aadhaarlinked PAN: Linking Aadhaar to PAN simplifies verification and reduces processing time.

10. Conclusion

Form No.60 serves as a crucial bridge for individuals who, for any reason, have not yet secured a PAN but need to engage in taxable transactions. It ensures compliance with the Income Tax Act while accommodating realworld delays in PAN issuance. Nonetheless, the form is a stopgap measure; acquiring a PAN remains the most efficient way to avoid higher tax deductions, simplify financial interactions, and maintain a clean tax record.

For detailed guidance, refer to the official Income Tax Department website or consult a qualified chartered accountant.

Income Tax Department Official Site