PAN Card (Permanent Account Number) in India – Eligibility, Apply, & Advantages of PAN Card

Posted by  Fintra , updated 2022-11-08

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:

1. What is PAN (Permanent Account Number) Card and its Eligibility Criteria? 
2. How to Apply for a PAN Card
3. Which Documents are Required when applying for a PAN Card?
4. When an Original PAN Card is lost, How to Apply for a Duplicate PAN Card?
5. The Different Types of PAN Cards
6. Structure of the PAN Card- PAN Card Details 
7. What are the Advantages/Benefits of a PAN Card?
8. How Can You Check the Status of Your PAN Card Application?
9. How Can You Correct Your PAN Card Information?
10. Linking your PAN Card Number with Your Bank Account 

What is PAN (Permanent Account Number) Card and its Eligibility Criteria? 

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: 

• Any individual who is liable to pay tax or has paid tax to the Income Tax Department. This is decided based on the tax slabs.
• Any individual who is doing a business or professional practice that earns more than Rs. 5 lakh annual turnover.
• Exporters and importers who are accountable to pay any form of tax or duty charges as per the Income Tax Act or any prevalent law.
• All sorts of trusts, charitable organisations, and associations. Every tax-paying entity such as minors, individuals, HUFs, trusts, and others has to apply for PAN.

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.

How to Apply for a PAN Card

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:

1. Visit the NSDL or UTIITSL website to download the PAN Card application form 49A or collect a copy of the form from UTIITSL agents/NSDL office
2. Fill up the form along with attaching the supporting documents (proof of identity, address and photographs)
3. Submit the form including the documents to the NSDL/UTIITSL office along with the processing fee
4. Within 15 working days, the PAN Card will be delivered to the address stated in the form 

Which Documents are Required when applying for a PAN Card?

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:

• Proof of identity: Aadhaar, Voter ID, Driving License, etc.
• Proof of address: Utility bill, water bill, bank account statement, statement of your credit card, Passport, Driving License, Domicile certificate issued by the Government, certificate of marriage, matriculation certificate, etc.

If belonging to a Hindu Undivided Family (HUF):

• Submit an affidavit that has been issued by the Karta of the HUF. The affidavit must clearly mention the name, address, and every coparcener's father's name.
• If belonging to HUF and individually applying for a PAN Card, then submit proof of identity, proof of address, and date of birth proof.

For companies registered in India:

• Submit a copy of the Registration Certificate that has been issued by the Registrar of Companies.

For Firms and Limited Liability Partnerships registered or formed in India:

• Submit a copy of the Registration Certificate which's issued by the Registrar of Companies.
• A copy of the Partnership Deed. 

For Trusts formed or registered in India:

• Submit a copy of the Registration Certificate Number issued by a Charity Commissioner.

For Association of Persons:

• Agreement Copy or Registration Number Certificate that has been issued by the Registrar of Co-operative Society or Charity Commissioner, or any document issued by the Central or State Government which mentions the individual's address and identity.

For applicants who are not Citizens of India:

• Proof of identity: Copy of PIO issued by the Government of India, Copy of OCI issued by the Government of India, Passport Copy, etc.
• Proof of Address: Bank statement of the residential country, NRE Bank statement, copy of VISA granted by an Indian company, registration certificate issued by FRO, etc.

When an Original PAN Card is lost, How to Apply for a Duplicate PAN Card?

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:

1. Visit TIN-NSDL or UTIITSL website to apply for a duplicate copy of a PAN card.
2. Fill out form 49A if you're an Indian citizen and Form 49-AA if you're a foreigner.
3. Do the payment online or get a demand draft issued.
4. After taking the printout of the form, send it to the Income Tax PAN Services Unit, NSDL e-Governance Infrastructure Limited, 5th Floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune – 411 016 (in case you're applying via NSDL)
5. The PAN Card will arrive in the next 45 days.

The Different Types of PAN Cards

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. 

Structure of the PAN Card- PAN Card Details 

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:

• Cardholder's Name: The most primary noticeable detail on the PAN Card is the name of the cardholder. If the card is for an individual, it'll bear the individual’s name, if the card is for a company, then the registered name of the company will be seen on the card and if the card is for a partnership firm, the name of the firm will be mentioned on the PAN Card.
• Cardholder's Father's Name: This is applicable in the case of individual cardholders. Beneath the name of the individual is where the name of the father of the cardholder gets mentioned.
• Date of birth: In the case of an individual’s PAN Card, the cardholder’s date of birth is located beneath the name of the father. This detail serves as the date of birth proof of the cardholder. In the case of companies and partnership firms, their registration date gets mentioned in this field.
• Permanent Account Number– The next and the most vital content of the PAN Card is the PAN (Permanent Account Number). This number is unique to every person/entity holding the card, and the number contains some key information. Based on the details provided by the entity, the number gets generated. The PAN is a ten-letter alpha-numeric number where each character denotes information such as the following:

1. First three letters: These first three letters are alphabetical in nature, and possess three letters of the alphabet from A to Z.
2. Fourth letter: The fourth character of the PAN designates the category of the taxpayer entity. Thus, the various entities and their respective characters 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 

• Fifth letter: The fifth letter stands for the first letter of the individual’s surname
• Remaining Letters: The remaining characters are just random. The first four characters are numbers, and the last one is an alphabet.
• Individual's Signature: Last detail found on the PAN Card is the signature of the individual, and thus, the PAN Card also acts as proof of the individual’s signature that's required for various financial transactions.
• Photograph of the individual – A photograph of the cardholder is also presented on the lower right-hand side of the PAN Card, this makes the card eligible to act as a photo identity proof of the individual. On the PAN Card of companies and firms, there's no photograph presented.

What are the Advantages/Benefits of a PAN Card?

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:

• For filing tax returns: Entities like companies, partnership firms, HUFs, etc., and individuals are needed to quote their PAN whenever they file a tax return. This act is a mandatory requirement. If no PAN card is presented, individuals and entities will have to pay a flat tax of around 30% on their earnings irrespective of the income-tax bracket they might fall in. Thus, for taxation, it's required to have a PAN and to check the PAN Card status one can use their Permanent Account Number
• Registration of business: Partnership firms, companies, Hindu Undivided Families, or other entities desiring to do registration of their businesses can't do so if they don't have a PAN to quote in the registration details
• For conducting financial transactions: There're a host of financial transactions that can only be done if the PAN Card of the individual/entity is available. The few common transactions facilitated by the PAN Card are the sale or purchase of any vehicle except a two-wheeler, the sale or purchase of any immovable property the value of which is Rs. 5 lakh and above, depositing any amount more than Rs. 50,000 in a bank, purchasing bonds that are valued at Rs. 50,000 or above, remitting funds outside India, travel expenses made for travelling overseas if such expenses are more than Rs.25,000, buying mutual fund schemes, purchasing insurance policies or shares valued at Rs.50,000 and above, etc.
• For obtaining utility connections: In numerous instances where utilities like a post-paid mobile phone connection, LPG connection, electricity connection, internet connection, etc. are required, a PAN Card is vital and comes in handy. However, whenever it's possible it is recommended to use alternate ID proof such as DL, Voter ID card, etc.
• For opening bank accounts: Nowadays, the bank’s Know Your Customer (KYC) norms have become relatively tough, and the PAN Card is a primary requirement, banks carry out their number verification when opening a bank account

How Can You Check the Status of Your PAN Card Application?

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:

• Step 1: Visit NSDL official portal
• Step 2: Pick the “Track PAN Status” option
• Step 3: Click on the “PAN-New/Change Request” under “Application Type”
• Step 4: Type your 15-digit acknowledgement number
• Step 5: Finally enter the security code and click on “Submit”

Now on the screen, the PAN application status will be displayed.

How Can You Correct Your PAN Card Information?

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:

• Click on “Changes or Correction in the existing PAN Card under “Application Type”
• On the next page, fill in the PAN Card correction form with the accurate details
• After uploading all the mandatory documents, click on “Submit”
• Complete the required payment

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.

Linking your PAN Card Number with Your Bank Account 

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:

• Step 1: Visit the bank’s online application, and log in to the internet banking account using the user ID and password
• Step 2: One will find options similar to PAN registration, Service requests, or Service. Pick the most suitable option
• Step 3: Next, select from options to update or link the PAN
• Step 4: Enter your PAN number and other necessary details, if any

When completing the above procedure, expect a successful linking of your PAN and bank account within 2-7 business days. 

Conclusion 

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!