PAN –Personal Account Number

Permanent Account Number (PAN) was introduced by the Indian Income Tax Department in order to facilitate easy retrieval of information and matching information relating to an assesses investment, payment of taxes, raising of loans, assessment, tax demand, tax arrears etc.

  • The Permanent Account Number (PAN) is unique, national, and permanent. It is unaffected by a change of address, even between states in India.
  • As a universal identification key the PAN helps to monitor all financial transactions of high net worth individuals and thereby indirectly prevent tax evasion.

Pan Card is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and is almost equivalent to a national identification number. It also serves as an important ID proof.

New PAN card takes approx 15 to 20 working days. Correction or Replacement card takes anything from 30 to 40 working days; however this may vary depending on the authorities discretion and load.

Application for fresh allotment of PAN can be made through Internet. Further, requests for changes or correction in PAN data or request for reprint of PAN card (for an existing PAN) may also be made through Internet.

For New PAN applications, in case of Individual and HUF applicants if Address for Communication is selected as Office, then Proof of Office Address along with Proof of residential address is to be submitted to NSDL applications made on and after 1st November 2009.

As per RBI guidelines, the entities making e-commerce transactions are required to provide PIN (Personal Identification Number) while executing an online transaction. Therefore, before making payment for online PAN/TAN applications using credit card / debit card / net banking, applicant is required to obtain PIN from Banks whose credit card/debt card/net banking is being used.

PAN Categories Documents Needed
Individual Applicant POI/ POA- Aadhaar, Passport, Voter ID, Driving Licence
Hindu Undivided Family An affidavit of the HUF issued by the head of HUF along with POI/POA details
Company registered in India Certificate of Registration issued by Registrar of Companies
Firms/ Partnership (LLP) Certificate of Registration issued by the Registrar of Firms/ Limited Liability Partnerships and Partnership Deed.
Trust Copy of Trust Deed or a copy of the Certificate of Registration Number issued by a Charity Commissioner.
Society Certificate of Registration Number from Registrar of Co-operative Society or Charity Commissioner
Foreigners Passport PIO/ OCI card issued by the Indian Government Bank statement of the residential country Copy of NRE bank statement in India

Eligibility for PAN

PAN Card is issued to individuals, companies, non-resident Indians or anyone who pays taxes in India.

Types of PAN

  1. Individual
  2. HUF-Hindu undivided family
  3. Company
  4. Firms/Partnerships
  5. Trusts
  6. Society
  7. Foreigners

Documents for PAN

PAN requires two types of documents. Proof of address (POA) and Proof of Identity (POI). Any two of the following documents should meet the criteria

If you have lost your PAN card, not to worry. Apply for a duplicate PAN card online or offline. Login on to NSDL or UTIITSL website, Fill the form 49-A for Indian citizen or Form 49-AA in case of a foreigner and make the payment online for a duplicate copy of your PAN card. The PAN will be dispatched within 45 days.

The PAN is valid for lifetime.

Yes. PAN can be made online through the following steps:

  • Visiting the official PAN – NSDL/UTIITSL website
  • Fill the form 49A or 49AA for (Indian/Foreigner) with your details.
  • Submit the required documents.
  • Pay the processing fee.
  • PAN will be dispatched within 15 days.

The Income Tax Business Application (ITBA) has now enabled tracking facility for transactions made with PAN for calculation of tax purposes.

The Income Tax Business Application (ITBA) has now enabled tracking facility for transactions made with PAN for calculation of tax purposes.

Online application can be made either through the portal of NSDL or portal of UTITSL.

The charges for applying for PAN is Rs. 93 (Excluding Goods and Services tax) for Indian communication address and Rs. 864 (Excluding Goods and Services tax) for foreign communication address. Payment of application fee can be made through credit/debit card, demand draft or net-banking. Once the application and payment is accepted, the applicant is required to send the supporting documents through courier/post to NSDL/UTITSL. Only after the receipt of the documents, PAN application would be processed by NSDL/UTITSL.

New PAN applications

For New PAN applications, in case of Individual and HUF applicants if Address for Communication is selected as Office, then Proof of Office Address along with Proof of residential address is to be submitted to NSDL applications made on and after 1st November 2009.

As per RBI guidelines, the entities making e-commerce transactions are required to provide PIN (Personal Identification Number) while executing an online transaction. Therefore, before making payment for online PAN/TAN applications using credit card / debit card / net banking, applicant is required to obtain PIN from Banks whose credit card/debt card/net banking is being used.

Why do you need PAN?

PAN is a unique identification number that enables each tax paying entity of India with the following:

  • Proof of Identity
  • Proof of Address
  • Mandatory for Filing Taxes
  • Registration of Business
  • Financial transactions
  • Eligibility to open and operate Bank Accounts
  • Phone Connection
  • Gas Connection
  • Mutual Fund – PAN is beneficial to complete e-KYC for mutual fund investments.

The union budget 2019 has proposed for taxpayers to use Aadhaar instead of PAN for filing income tax returns on or after 1 September 2019. It has been proposed in the union budget 2019 that the Income-tax officer can themselves allot PAN to taxpayer filing return with Aadhaar.

Purpose of having PAN card

The purpose of having a pan card is strengthened from the fact that from 1 January 2005 it has been made mandatory to quote Permanent Account Number (PAN) on challans for any payments due to Income Tax Department (ITD), while filing returns of income and all correspondence with any income tax authority. Thus Purpose of having Pan Card has become mandatory.

Benefits of PAN card

One of the benefits of pan card is eligibility of an individual or entity to enter into transactions of sale or purchase of assets as mentioned below:

  • PAN is required to be quoted in the deed made during sale or purchase of any immovable property valued at five laksh rupees or more.
  • Copy of PAN is required during Sale or purchase of a motor vehicles having more than two wheels excluding detachable side-car attached to the two wheeler.

Benefits of PAN card also extends to various banking transactions as below:

  • PAN is required for opening a bank account in both private and nationalized banks.
  • Banks, private or nationalized, emphasize on importance of PAN to entertain Time Deposit exceeding fifty thousand rupees.
  • PAN is also required while making payment in cash for purchase of bank drafts or pay orders or banker’s cheques for an amount aggregating to fifty thousand rupees or more during any one day.
  • Deposit in cash aggregating to fifty thousand rupees or more with a bank during any one day requires PAN.

Importance of PAN is emphasized during transactions involving other financial instruments as follows:

  • Deposit, exceeding fifty thousand rupees, in any account with Post Office Savings Bank.
  • Contract of a value exceeding one laksh rupees for sale or purchase of securities.

Certain Service providers also emphasize on the importance of PAN

  • Making an application for installation of a telephone connection (including a cellular telephone connection) requires a PAN.
  • PAN is required when payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time is made.
  • Payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time also requires PAN.
  • Proof of Identity
  • Proof of Address
  • Mandatory for Filing Taxes
  • Registration of Business
  • Financial transactions
  • Eligibility to open and operate Bank Accounts
  • Phone Connection
  • Gas Connection
  • Mutual Fund – PAN is beneficial to complete e-KYC for mutual fund investments.

The union budget 2019 has proposed for taxpayers to use Aadhaar instead of PAN for filing income tax returns on or after 1 September 2019. It has been proposed in the union budget 2019 that the Income-tax officer can themselves allot PAN to taxpayer filing return with Aadhaar.

Advantage of PAN

Advantage of PAN includes deduction of fraudulent transactions, reduce tax evasion, transparency in transactions between buyer and seller.

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