What are Form 60 and Form 61?
Form 60 and Form 61 are used in India for certain financial transactions.
Form 60 is used when an individual does not have a Permanent Account Number (PAN) and is carrying out specified transactions that require PAN. It is a declaration of identity and address.
Example: Let's say you want to open a bank account, but you don't have a Permanent Account Number (PAN) because you haven't been earning a taxable income. However, the bank requires a PAN for all account holders. In this case, you would need to fill out Form 60. You would provide your personal details, such as your name, address, and a declaration that you do not have a PAN due to not having taxable income. The bank will use this form to comply with the regulatory requirement of obtaining PAN information from account holders.
Table of Contents
- What are Form 60 and Form 61?
- Benefits of using Form 60 and Form 61 in India
- Issues with Form 60 and Form 61
- When Form 60 and Form 61 of Income Tax are required
- Documents Required for Form 60 and 61
- What happens when declarations made are found wrong in Form 60 and Form 61?
- How to Fill Form 60 and 61?
Form 61, on the other hand, is a declaration to be filed by an individual who is receiving income but doesn't have a PAN. This is generally used by non-resident individuals to declare their income in India.
Example: Imagine you're a non-resident Indian (NRI) who earned income from investments in India. You haven't obtained a PAN because you live abroad, but the bank is required to report your income to the Indian tax authorities. To do so, you would need to fill out Form 61. This form includes your personal information, details about your income, and a declaration that you don't have a PAN. The bank will use this form to report your income while also complying with the requirement to report PAN information.
Both forms are used to ensure compliance with tax regulations and to prevent tax evasion. Providing false information can have legal consequences
Benefits of using Form 60 and Form 61 in India
|
Form 60 |
Form 61 |
| Financial Transactions: Form 60 allows individuals without a PAN to still engage in specified financial transactions that would normally require a PAN. This is useful for those who don't have taxable income but need to carry out certain financial activities like opening a bank account. | NRI Income Reporting: Non-resident Indians (NRIs) who have earned income in India can use Form 61 to declare their income when they don't have a PAN. This helps them fulfill their tax obligations without the need for a PAN. |
| Compliance: It helps financial institutions comply with regulatory requirements by capturing necessary information for transactions involving individuals without PAN. | Legal Compliance: Financial institutions can report NRI income to the Indian tax authorities without PAN information through the use of Form 61, ensuring compliance with tax reporting regulations. |
| Documentation: Form 60 serves as a valid alternative to PAN for specific transactions, ensuring that individuals aren't excluded from financial activities due to the lack of a PAN. | Ease for NRIs: NRIs who may not have a PAN due to their non-resident status can still fulfill their tax reporting requirements using Form 61. |
In both cases, these forms play a crucial role in ensuring transparency, preventing tax evasion, and enabling individuals to participate in financial transactions and income reporting even when they don't possess a PAN.
Issues with Form 60 and Form 61
While Form 60 and Form 61 serve important purposes, there are certain issues and considerations associated with their use:
| Issues with Form 60 | Issues with Form 61 |
| Potential Misuse: Since Form 60 is used by individuals who do not have a PAN, there's a risk of misuse or fraudulent activities. People might provide false information on the form to evade taxes or engage in illegal financial transactions. | NRI Taxation Complexity: While Form 61 assists NRIs in reporting income without a PAN, the taxation rules for NRIs can be complex. Determining the correct tax liability and complying with reporting requirements can be challenging. |
| Incomplete Information: Without a PAN, there might be limitations in verifying the identity of the individual accurately, which could lead to incomplete or inaccurate information being provided on the form. | Documentation Requirements: NRIs might need to provide additional documentation to support their income declaration when using Form 61, which can add to the administrative burden. |
| Limited Applicability: Form 60 is only applicable for specific transactions. It cannot be used for all financial activities, which might inconvenience individuals who need to carry out transactions that require a PAN. | Potential Delays: Reporting income using Form 61 might involve additional processing time due to the need for manual verification of information, which could lead to delays in tax-related matters. |
In both cases, these forms are primarily designed to address specific scenarios where individuals don't have a PAN but need to engage in financial transactions or report income. However, to mitigate the issues associated with these forms, it's important for individuals to provide accurate information, and for financial institutions and tax authorities to have effective systems in place to verify and process the submitted information.
When Form 60 and Form 61 of Income Tax are required
| Form 60 for Income Tax is required in various transactions: | Form 61 is used in various specific transactions: |
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Documents Required for Form 60 and 61
What happens when declarations made are found wrong in Form 60 and Form 61?
How to Fill Form 60 and 61?
Online procedure of Filling Form 60 are :
- First, download the Form 60 from the official website.
- Fill the details like name, Aadhaar card number, address, father’s name, date of birth, mobile number, etc.
- Once transaction is done provide the details including mode and amount.
- Mention the address where Income Tax Returns are submitted.
- If PAN card applied for but not received, include application date and acknowledgment number.
- Recheck and confirm filled information.
Online procedure of Filling Form 61 are :
- Visit the e-filing portal and login.
- Under 'My Account' tab, select 'Reporting Portal' for first-time registration.
- Enter details like category, reporting person's address, and form type.
- Then, Provide Principal Officer's information.
- ITDREIN is automatically generated once submitted.
- Principal Officer receives email and SMS notification to registered email and mobile number.
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