PAN (Permanent Account Number) is one of the means of identifying the various taxpayers in India. The Pan Card is a 10-digit unique identification alphanumeric number that contains alphabets and numbers. The identification number is assigned to all taxpayers in India. The PAN system of identification is generally a computer-based system, which assigns a unique identification number to an Indian tax-paying entity. It's via this method that tax-related information of a person gets recorded in a single PAN number which acts as the primary key for the storage of information.
The information is later on shared across India, hence, for this reason, no two people on tax-paying entities will have the same PAN. When PAN is allotted to an entity, the PAN Card also is given by the Income Tax Department. If PAN is a number, then the PAN Card is a physical card bearing a person's PAN, its name, date of birth, father’s or spouse’s name, and a photograph. A copy of this card may get submitted as proof of identity or DoB. Since it is unaffected by any change in address, PAN Card is valid for a lifetime.
In this blog, Fintra highlights vital information about PAN. The topics we will cover will be:
As described above in the introduction, PAN Cards are issued under the Income Tax Act, 1961, and it possesses a unique 10-digit alphanumeric code, which is used for unique identification. This computer-generated code is unique to the holder of the card, and it's valid for a lifetime. The Income Tax department of India is responsible for furnishing this number to the potential taxpayer to curb tax evasion. This is possible because the PAN is an electronic system which tracks the financial transactions of every tax-paying citizen. No two individuals can have the same number, and the unique identification number gets allotted to all individuals through a laminated card called the PAN Card.
Moving on to the eligibility criteria for PAN Cards, this card is given to individuals, companies, non-resident Indians, or anyone who is paying taxes in India. In fact, companies and partnership firms have to avail PAN Cards because it becomes mandatory for such entities to have them while they are filing their income tax returns. Going a bit more in-depth, under section 139A of the Income Tax Act, the following taxpaying entities are required to have a Permanent Account Number:
From the above information, we can conclude that almost all Indian citizens, including NRIs, are required to get a PAN Card. However, since there are various categories of PAN Card holders, the authorities have developed certain segregations to differentiate PAN Card types.
Applying for a PAN Card is very easy, and it can be done in two ways, online and offline. The following dent will highlight the methods one can use to apply for and get a PAN card:
The Online PAN Card Application Process
You can apply for a PAN Card online through the NSDL (National Securities Depository Limited) portal or the UTIITSL (UTI Infrastructure Technology And Services Limited) portal. Following are the steps for applying for a PAN card online mode of application and registration:
Step 1: Visit NSDL or UTIITSL website for obtaining the online application for PAN Card
Step 2: Pick the option ‘New PAN’
Step 3: Select the PAN Card form 49A. This form should be selected for those who are Indian citizens, NRE/NRI or OCI individuals
Step 4: Fill out the form with the individual’s details
Step 5: Applicants will be required to pay the processing fee online or through a demand draft after they've submitted the form to initiate the processing of it
Step 6: After the fees have been paid and submitting the PAN Form 49A, one will receive an acknowledgement slip, which is generated containing the 15-digit acknowledgement number
Step 7: Applicant can e-Sign the application using the Aadhaar OTP authentication or send the application along with required documents to the NSDL PAN office or UTIITSL office by courier within 15 days of online submission of Form 49A
Step 8: After the acknowledgement form has been couriered to the concerned office, PAN no. verification will be done, and the card gets generated after the NSDL/UTIITSL PAN verification. A physical PAN Card will be sent to the customer’s address as mentioned in its form within 15 days
How to Apply for PAN Card Offline
Individuals can also apply for the PAN Card offline by visiting any district-level PAN agency:
When applying for a PAN Card, some key documents are required to be submitted along with the PAN Card application form (Form 49A or Form 49AA) or the acknowledgement form if applying online for the PAN Card verification process. The requirement documents vary as it depends on the applicant type. Following are some of the key documents that are required when applying for a PAN Card:
For individual applicants:
If belonging to a Hindu Undivided Family (HUF):
For companies registered in India:
For Firms and Limited Liability Partnerships registered or formed in India:
For Trusts formed or registered in India:
For Association of Persons:
For applicants who are not Citizens of India:
If accidentally the PAN Card gets lost, one can apply for a duplicate one online and/or offline. TIN-NSDL and UTIITSL enable you to fill out the form and make the payment online for applying for a duplicate copy of the PAN Card. Following are the steps to do it:
PAN Cards have been divided into various categories depending on the kind of taxpaying entity and can be applied via varied variants of Form 49 issued by the Indian government. This classification can be comprehended by the fourth character of every PAN, which varies for different entities. Below is a quick overview of some of the different types of PAN Cards and the Forms used for availing the same:
PAN Card for Individuals
This type of PAN Card is the most common variant issued to individuals. This card can be applied through Form 49A, which is available online through the NSDL and UTIITSL websites. Individuals include residents of India including minors and students.
PAN Card for Non-Resident Individuals or Persons of Indian Origin
NRIs and PIOs may avail a PAN Card for purposes of taxation in India, and they also have to submit Form 49A for availing this card.
PAN Card for Foreign Entities paying Tax in India
Corporates or firms registered outside India but are paying taxes in India through their business operations conducted in India also have to avail a PAN Card. They will have to fill out and submit Form 49AA to begin the PAN Card application process.
PAN Card for OCI and NRE
Overseas Citizens of India (OCI) and Non-Resident Entities also can apply for a PAN Card. The suitable form for them to be filled out when applying for the card is Form 49AA.
PAN Card for Indian Companies
Firms and corporate entities that are registered and working in India can also apply for the PAN Card for their financial and tax-related transactions.
PAN Cards contain some very basic information that also qualifies them as identity and age proof when complying with the Know Your Customer (KYC) guidelines. The details contained in the card are as follows:
o A – Association of Persons
o B – Body of Individuals
o C – Company
o F – Firms
o G – Government
o H – Hindu Undivided Family
o L – Local Authority
o J – Artificial Judicial Person
o P – Individual
o T – Association of Persons for a Trust
The PAN Card is vital for taxpayers along with being necessary for all financial transactions as it is used to track the inflow and outflow of every individual's money. Basically, this card is essential while paying income tax, receiving tax refunds, and receiving communication from the Income Tax Department.
During Indian Budget 2019, it proposed that those who didn't have a PAN, could use their Aadhaar number to file returns and for any other purpose where PAN was earlier mandatory. However, PAN persists to be necessary for a large number of monetary transactions. The PAN Card even serves as proof of identity. Following are some of the benefits, uses and advantages of having a PAN:
If you desire to check your PAN Card application status, there are several ways in which you can do so. Probably the most well-known method is to check with your 15-digit acknowledgement number that you must have received upon successful application. Following is how to proceed with it:
Now on the screen, the PAN application status will be displayed.
If you feel you have fed in any wrong information on your issued PAN card, you can correct it by referring to the section discussing how to apply for a PAN Card online. First, follow the instructions up till Step 3, and then proceed as follows:
You will now receive a new acknowledgement slip. Upon receiving it, take a print and post it to NSDL’s Income Tax PAN Service Unit.
Since an individual's bank account details provide all the insight into their financial transactions, this is the place where the IT department deducts taxes from as well.
Therefore, linking PAN Card to a bank account is a way to link a PAN Card to income tax. Following are the steps to do it:
When completing the above procedure, expect a successful linking of your PAN and bank account within 2-7 business days.
In addition, to linking PAN to a bank account, the government even instructs every taxpayer to link a PAN Card to an Aadhaar Card under Section 139AA of the IT Act, which was introduced in the Union Budget 2017. The above information provides insight on the PAN Cards and their importance. Thus, if you've not obtained one yet, do it right away!