Permanent Account Number (PAN)

The Permanent Account Number (PAN) is a crucial ten-digit alphanumeric identifier issued by the Income Tax Department of India. It acts as your unique tax identity, streamlining financial transactions and simplifying tax compliance. Let’s delve deeper into the world of PAN, understanding its features, benefits, and how to obtain one.

What is a PAN?

Imagine a PAN as your personal tax passport. It’s a unique combination of letters and numbers, assigned to individuals and entities for tracking financial transactions and ensuring tax accountability. The PAN card, a laminated document issued by the Income Tax Department, serves as physical proof of your PAN.

Key Features of a PAN:

• Ten-digit alphanumeric code: The PAN comprises five letters, four numbers, and one checksum digit. Each character holds specific information:
  • First three letters: Series assigned by the Income Tax Department
  • Fourth letter: Represents the status of the PAN holder (P for Individual, C for Company, H for Hindu Undivided Family, etc.)
  • Next four numbers: Randomly generated
  • Last digit: Checksum digit calculated based on the previous nine characters to ensure accuracy
• Permanent and valid across India: Once issued, your PAN remains valid throughout your lifetime and across India, regardless of any changes in address or name.
• Multiple uses: PAN serves various purposes beyond just filing taxes. It’s mandatory for opening bank accounts, investing in mutual funds and shares, applying for credit cards, registering property, and conducting other financial transactions.

Benefits of obtaining a PAN:

• Simplified tax compliance: PAN facilitates easy filing of income tax returns by linking all your income sources and transactions under one unique identifier.
• Reduced tax deductions: Providing your PAN to banks and financial institutions helps avoid higher Tax Deducted at Source (TDS) on your income.
• Transparency in financial transactions: PAN brings transparency to your financial dealings, making it easier for authorities to track income and prevent tax evasion.
• Access to financial services: A PAN is essential for accessing various financial services and products, including loans, investments, and government schemes.

How to obtain a PAN:

The process of obtaining a PAN is straightforward. You can apply online through the official e-filing website of the Income Tax Department (https://www.incometax.gov.in/iec/foportal/) or offline by submitting a PAN application form (Form 60) at any PAN Service Center or authorized agent.

Documents required:

• Proof of identity (Aadhaar card, Voter ID, driving license, etc.)
• Proof of address (Aadhaar card, bank statement, utility bill, etc.)
• Photographs

Processing time and fees:

The processing time for a PAN application typically takes 15-30 days. The application fee is ₹80 for Indian citizens and ₹1000 for foreign nationals.

Remember:

• Protecting your PAN information is crucial, as it’s sensitive personal data. Avoid sharing your PAN details with unauthorized individuals or websites.
• Update your PAN card promptly in case of any changes in your name, address, or father’s name to maintain its validity and accuracy.
• Losing your PAN card? Don’t worry! You can easily apply for a duplicate PAN card through the same online or offline channels.

In conclusion, the Permanent Account Number (PAN) plays a vital role in India’s tax system. Obtaining a PAN is not just mandatory for fulfilling your tax obligations, but also opens doors to various financial opportunities. So, ensure you have your unique tax identity in place and leverage its benefits for a smooth and transparent financial journey.

Who has to obtain PAN?

• Every person if his total income or the total income of any other person in respect of which he is assessable during the year exceeds the maximum amount which is not chargeable to tax.
• A charitable trust who is required to furnish return under Section 139(4A)
• Every person who is carrying on any business or profession whose total sale, turnover, or gross receipts are or is likely to exceed five lakh rupees in any year
• Every importer/exporter who is required to obtain Import Export code
• Every person who is entitled to receive any sum/income after deduction of tax at source
• Any person who is liable to pay excise duty or a producer or manufacturer of excisable goods or a registered person of a private warehouse in which excisable goods are stored and an authorized agent of such person
• Persons who issue invoices under Rule 57AE requiring registration under Central Excise Rules, 1944
• A person who is liable to pay the service tax and his agent
• Persons registered under the Central Sales Tax Act or the general sales tax law of the relevant state or union territory
• Every person who intends to enter into specified financial transactions in which quoting of PAN is mandatory

What are the various types of PAN Application ?

There are three types of applications:

1) Application for allotment of PAN (Form 49 A)

This application should be used when the applicant has never applied for a PAN or does not have PAN allotted to him.

2) ‘Request for New PAN Card or/and Changes or Correction in PAN data’

This application should be used when PAN has been allotted already to applicant but a new PAN card is required or when data associated with the PAN (e.g. name of applicant / date of birth / address) is required to be updated in the records of Income Tax Department.

3) Application for allotment of PAN (Form 49AA) – applicable for foreign citizens

This form should be used when the applicant has never applied for a PAN or does not have PAN allotted to him. An applicant can visit Income Tax Department (ITD) website to find whether a PAN has been allotted to him or not.

How to Apply for PAN ?

Income Tax Department has authorised UTI Infrastructure Technology and Services Limited (UTIITSL) and National Securities Depository Limited (NSDL) to set-up and manage PAN Service Centers. UTIITSL and NSDL have established PAN Service Centers and TIN Facilitation Centers at various places in major cities of India (hereinafter referred to as PAN application centers of UTIITSL/NSDL).

Thus, a person wishing to obtain PAN can apply for PAN by submitting the PAN application form (Form 49A/49AA) along with the related documents and prescribed fees at the PAN application center of UTIITSL or NSDL. An online application can also be made from the website of UTIITSL or NSDL.

As per Section 139AA, every person who is eligible to obtain Aadhaar is required to quote his Aadhaar number in the PAN application form with effect from 1st day of July, 2017. If any person does not possess the Aadhaar Number but he had applied for the Aadhaar card then he can quote Enrolment ID of Aadhaar application Form.

However, the provisions of section 139AA shall not apply to an individual who does not possess the Aadhaar number or the Enrolment ID and is:-

1. residing in any of these States-Assam, Jammu and Kashmir and Meghalaya;
2. a non-resident as per the Income-tax Act, 1961;
3. of the age of 80 years or more at any time during the previous year, i.e., super-senior citizen;
4. not a citizen of India.

Hence, it will not be mandatory for an individual (as notified above) to quote his/her Aadhaar Number in the PAN application form

In case of an applicant, being a company which has not been registered under the Companies Act, 2013, the application for allotment of a Permanent Account Number may be made in SpiceINC-32 specified under sub-section (1) of section 7 of the said Act for incorporation of the company.

A resident person shall apply for PAN in form 49A and a non-resident person including a foreign company shall apply for allotment of PAN in form 49AA.

Individual applicants will have to affix two recent, coloured photograph (Stamp size 3.5 cms x 2.5. cms) on PAN application form

Prescribed document must be furnished as a proof of ‘Identity’ ‘Address’ and ‘Date of Birth’.

Designation and Code of concerned Assessing Office of Income Tax Department will have to be mentioned in PAN application form.

The address, phone numbers, etc., of PAN application centers of UTIITSL or NSDL at which PAN application can be submitted can be obtained from :

• Website of Income Tax Department :www.incometaxindia.gov.in
• Website of UTIITSL :www.utiitsl.com
• Website of NSDL : www.tin-nsdl.com

Note: Every person who has been allotted PAN as on the 1st day of July, 2017, and who is eligible to obtain Aadhaar number shall intimate his Aadhaar number on or before a date to be notified by the Central Government. In case of failure to intimate the Aadhaar number, PAN allotted to the person shall be deemed to be invalid and other provisions of this Act shall apply, as if the person had not applied for allotment of PAN.

Fees required for PAN Application

I . If Physical PAN Card is required:

While submitting PAN application form, applicant will have to indicate whether physical PAN card is required. If applicant opts for physical PAN Card, then physical PAN card will be printed & dispatched at communication address. The e-PAN card in PDF format will be dispatched at e-mail ID mentioned in PAN application form, if the same is provided. Fees applicable are as follows:-

PAN applications submitted at TIN Facilitation Centres / PAN Centres

1. Dispatch of physical PAN Card in India (Communication address is Indian address) – Rs. 107/- (inclusive of taxes)
2. Dispatch of physical PAN Card outside India (where foreign address is provided as address for communication) – Rs. 1,017/- (inclusive of taxes)

PAN applications submitted Online through paperless modes (e-KYC & e-Sign / e-Sign scanned based / DSC scanned based):

1. Dispatch of physical PAN Card in India (Communication address is Indian address) – Rs. 101 /- (inclusive of taxes)
2. Dispatch of physical PAN Card outside India (where foreign address is provided as address for communication) – Rs. 1,011/- (inclusive of taxes)

II. If Physical PAN Card is not required:

PAN applicant will have to indicate at the time of submission of PAN application, if the physical PAN Card is not required. In such cases, email ID will be mandatory & e-PAN Card will be sent to the PAN applicant at the email ID. Physical PAN Card will not be dispatched in such cases. Fees applicable are as follows:-

PAN applications submitted at TIN Facilitation Centres / PAN Centres

e-PAN Card will be dispatched at the email ID mentioned in the PAN application form – Rs. 72/- (inclusive of taxes)

PAN applications submitted Online through paperless modes (e-KYC & e-Sign / e-Sign scanned based / DSC scanned based):

e-PAN Card will be dispatched at the email ID mentioned in the PAN application form – Rs. 66/- (inclusive of taxes)

How soon a PAN card is dispatched ?

Normally 15 days are required to process the application, provided application is found to be in order.