PAN Card - Permanent Account Number (PAN) in India

 

Permanent Account Number or PAN is a means of identifying various taxpayers in the country. PAN is a 10-digit unique identification alphanumeric number (containing both alphabets and numbers) assigned to Indians, mostly to those who pay tax.

The PAN system of identification is a computer-based system that assigns unique identification number to every Indian tax paying entity. Through this method, all tax-related information for a person is recorded against a single PAN number which acts as the primary key for storage of information. This is shared across the country and hence no two people on tax paying entities can have the same PAN.

When PAN is allotted to an entity, PAN Card too is given by the Income Tax Department. While PAN is a number, PAN Card is a physical card that has your PAN as well as name, date of birth (DoB), and photograph. Copies of this card can be submitted as proof of identity or DoB.

Your PAN Card is valid for lifetime because it is unaffected by any change in address.

 

How to Apply for PAN Card

PAN Card application can be made online on one of the following websites:

NSDL

UTIITSL

You can also apply offline at any of the district-level PAN agencies. You can apply for a new PAN as well as make correction or change information yourself. You can even request for a duplicate PAN Card or reprint the card if you lose the original.

For new PAN, Indian citizens and NRIs (including companies, NGOs, partnership firms, local bodies, trusts, etc.) need to fill Form 49A. Foreigners and foreign entities need to use Form 49AA. These forms, along with all the required PAN documents , should be submitted to the Income Tax PAN Services Unit.

Once you apply for a new or duplicate PAN, or request for corrections/changes, you can track the status of PAN application via the acknowledgement number provided.

As per the NSDL website, the entire process of printing and dispatching cards takes approximately 2 weeks or 14 days.

 

PAN Card Application Do's and Don'ts

·       Fill in all the details as per the identity and address proof documents you are submitting.

·       Get your thumb impression attested by a Magistrate/Notary before submitting the form, to avoid disqualification.

·       Write the complete address and provide accurate contact details in the form.

·       Fill in the application form in capital letters.

·       Don't make corrections or over-write anywhere on the form.

·       Do not use initials in the first name or last name columns.

·       Do not apply for a new PAN card if your old PAN card is lost/stolen/defaced. Request for a duplicate PAN instead.

 

 

Why Is PAN Important? – Uses and Benefits of Having PAN Card

 

PAN Card is important for taxpayers as it is necessary for all financial transactions and is used to track the inflow and outflow of your money. It is important when paying income tax, receiving tax refunds, and receiving communication from the Income Tax Department.

The Indian Budget 2019 proposed that individuals who do not have a PAN can use their Aadhaar number to file returns and for any other purpose where PAN was earlier mandatory. This means that if you have not link pan with aadhar yet, or do not have a PAN but have an Aadhaar, you don't have to either link PAN and Aadhaar, or apply for a new PAN. However, the rules about this are still in the process of creation/updation/approval.

That said, PAN continues to be necessary for a large number of monetary transactions. PAN Card also serves as a proof of identity. Given below are some of the uses and advantages of having a PAN.

·       PAN needs to be quoted while paying direct taxes.

·       Taxpayers need to input their PAN when paying income tax.

·       While registering a business, PAN information needs to be furnished.

·       A lot of financial transactions require PAN information. Some of these transactions are:

·       Sale or purchase of property (immovable) which is valued at Rs.5 lakh or above

·       Sale or purchase of a vehicle except a two-wheeler

·       Payments made towards hotels and restaurants and which are above Rs.25,000

·       Payments made in connection with travel requirements to other countries. The amount in this case if it exceeds Rs.25,000, then you need to quote your PAN

·       Payments of more than Rs.50,000 towards bank deposits

·       Purchase of bonds worth Rs.50,000 or more

·       Purchase of shares worth Rs.50,000 or more

·       Purchase of insurance policy worth Rs.50,000 or more

·       Purchase of mutual fund schemes

·       Payments made for more than Rs.5 lakh towards purchase of jewellery and bullion

·       To remit money out of India

·       Transfer of funds from NRE to NRO account

 

·       Since PAN Card contains information such as Name, Age and photograph, it can be used throughout the country as a valid identity proof.

·       PAN is the best possible way to keep track of your tax payment. Otherwise, you might be required to pay it multiples times since your tax payment cannot be verified.

·       Since PAN is unique for every entity, its misuse is almost impossible for purposes of tax evasion or other devious means.

·       PAN Card can be used to avail utility connections such as electricity, telephone, LPG, and internet.

Who Should Get PAN? – PAN Card Eligibility

 

Under section 139A of the Income Tax Act, the following taxpaying entities are required to have a Permanent Account Number:

·       Any person who has paid tax or is liable to pay tax to the Income Tax Department. This will be decided based on the tax slabs.

·       Any person who is carrying out a business or professional practice which earns him a yearly turnover of more than Rs.5 lakh in any year of assessment.

·       Importers and exporters who are liable to pay any form of tax or duty charges as per the Income Tax Act or as per any prevalent law

·       All kinds of trusts, charitable organisations, and associations.

All tax paying entities – minors, individuals, HUFs, partnerships, companies, body of individuals, trusts, and others – should apply for PAN.

 

Tracking PAN Transactions

The government recently unveiled a programme by which it can track transactions made through a PAN card for the purpose of calculating tax. Known as the Income Tax Business Application-Permanent Account Number or ITBAN-PAN, it will enable the Income Tax Department to track every transaction made where a particular PAN number was quoted.

·       All financial transactions such as mergers, acquisitions, liquidation, and amalgamation of PAN as well as dissolution information where a particular PAN card was quoted can be traced through the software.

·       All existing PAN information and the entire database of PAN information has also been moved to this software.

What happens if you don't have PAN Card?

If your income falls in the taxable bracket, not having a PAN card would result in:

·       Flat 30% tax on your earnings and wealth, as stipulated by the Income Tax Department of India. This rule applies to individuals, companies and all entities eligible for tax, including foreign nationals and firms registered outside India.

·       Not being able to purchase a motor vehicle, buy immovable property worth over Rs. 10 lakh, or open a bank account, among other activities.

·       Businesses unable to conduct a large chunk of their financial activities and procurement.

*Please note that these rules may change once Aadhaar and PAN become interchange

 

New Design of PAN Cards

The Income Tax Department has prescribed a new format for PAN Cards issued after 1 January 2017. The changes made to the new PAN Card have been listed below:

·       A Quick Response (QR) code has been printed onto the new PAN Card which will carry details of the card holder. This QR code can be used for verification of data.

·       New sections for the name of the card holder, the card holder's father's name, and date of birth have been added.

·       The location of the PAN and the signature of the card holder have been changed.

PAN Card Forms

 

In order to apply for a PAN card, an application form has to be filled out. There are two types of application forms – Form 49A and Form 49AA. Both the forms can be availed through both online and offline platforms.

·       Form 49A: The Form 49A is used by Indian individuals or entities to apply for a PAN card. Students and minors can also apply for PAN using this form.

·       Form 49AA: The Form 49AA is the application form for PAN which is used in the case of foreigners.

The forms have to duly filled up and sent in to the TIN-NSDL's office.

 

The Cost of PAN Application

An individual can make an online application for his or her PAN card. This can be done through the NSDL website or the UTITSL portal. The cost of application for PAN can be summed as follows:

·       For Indian communication address: Rs.93 (excluding GST)

·       For foreign communication address: Rs.864 (excluding GST)

 

How to make Changes or corrections in PAN Card

Given below are the steps you will have to follow if you wish to make changes or correction to your Pan Card online:

·       You can visit the NSDL website and under ‘Services’, click on PAN.

·       Scroll down and under ‘Change/Correction in PAN Data’, click on ‘Apply’.

·       Under ‘Application Type’, select ‘Changes/Correction in PAN Data’.

·       Enter the other details, and click on Submit’.

·       You will get a token number which you can use later for tracking purposes.

·       Continue to the application form where you will have to state the changes or correction in PAN Card. Provide the new details and make a payment of Rs.93 and submit the form.

·       You will have to send the required documents as proof via post to NSDL. The documents you will most likely have to submit will be proof of address, proof of identity, and the proof of document showing the change you wish to make in your PAN Card.