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Comprehensive Guide to what is PAN and How to apply for Pan card online

PAN - The Introduction

A PAN (Permanent Account Number) card is a unique alphanumeric identifier issued by the Income Tax Department of India. It is a crucial identifier for individuals and entities engaging in financial transactions. The PAN card is essential for various financial activities, such as filing income tax returns, opening a bank account, conducting high-value transactions, and more.

The details included in a PAN card are:

  • PAN Number 

  • Full Name

  • Father's Name (Only for Individuals): 

  • Date of Birth/Incorporation

  • Photograph

  • Signature

  • Type of Holder: The type of entity or individual is identified by the fourth character in the PAN.

  • Address: The residential or office address of the cardholder is included.

  • Jurisdiction Code: This code represents the assessing officer under whose jurisdiction the PAN cardholder falls.

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 PAN: The key features

The PAN card contains a 10-character alphanumeric code, which is unique to each cardholder. The structure of the PAN number is in the form of five letters, followed by four digits, and ending with one letter (e.g., ABCDE1234F). The first three letters are random alphabetic characters, the fourth letter represents the type of holder (individual, company, HUF, etc.), and the fifth letter is the first letter of the cardholder's surname. The numeric digits in the middle are unique to each PAN card.

 

India's Permanent Account Number (PAN) has several key features that make it a crucial element in the financial and taxation landscape. Here are the key features of PAN:

Unique Identifier:

PAN is a 10-character alphanumeric code unique to each individual or entity. This uniqueness ensures precise identification in financial transactions.

Mandatory for Financial Transactions:

PAN is mandatory for various financial transactions, including opening a bank account, conducting high-value transactions, buying or selling immovable property, and more.

 Income Tax Filing:

PAN is essential for filing income tax returns. It links all financial transactions to the individual or entity, providing a comprehensive view for taxation purposes.

Prevents Tax Evasion:

Linking multiple financial transactions to a single PAN helps prevent tax evasion by providing a transparent view of an individual's or entity's financial activities.

Type of Holder Identification:

The fourth letter in the PAN code represents the type of holder, distinguishing between individuals, companies, Hindu Undivided Families (HUFs), trusts, and others.

International Transactions:

PAN is required for individuals engaged in international transactions, making it a crucial document for Non-Resident Indians (NRIs) and entities involved in cross-border financial activities.

Government Benefits and Subsidies:

PAN is often used to administer government benefits and subsidies. It ensures these benefits reach the intended recipients and minimises the risk of fraudulent claims.

Proof of Identity:

PAN serves as a valid proof of identity for individuals. It is widely accepted as an identification document in various official and financial processes.

 Financial Compliance:

PAN is a prerequisite for various legal and financial compliances, including company registrations, opening demat accounts, and complying with regulatory requirements.

Non-Resident Transactions:

For non-residents, including NRIs, PAN is essential for engaging in financial transactions in India. It facilitates the tracking of financial activities and tax liabilities for non-resident individuals and entities.

How to Identify individuals and entities through PAN

4th letter in the PAN code

The 4th letter in the PAN code represents the type of holder. Different letters signify different types of entities. 

 P:

Individual

C:

Company

H:

Hindu Undivided Family (HUF)

F:

Firm

A:

Association of Persons (AOP)

T:

Trust

B:

Body of Individuals (BOI)

L:

Local Authority

J:

Artificial Juridical Person

G:

Government

So, by looking at the 4th letter, you can identify the broad category of the PAN holder

5th letter in the PAN

The 5th letter in the PAN represents the first letter of the PAN holder's surname. This adds a level of personalisation and specificity to the identification process. For individuals, this letter is the initial letter of the individual's surname. For non-individual entities, the 5th letter might represent the first letter of the entity's name.

For example, if the 4th letter is "P" (indicating an individual), and the 5th letter is "K," it suggests that the PAN belongs to an individual, and the first letter of their surname is "K."

Example:

Let's take the PAN "BVWPL3356F" as an example:

  • The 4th letter is "P," indicating that it is an individual's PAN.

  • The 5th letter is "L," representing the first letter of the individual's surname.

 

In this way, understanding the 4th and 5th letters provides valuable information about the type of PAN holder and, in the case of individuals, offers a glimpse of their surname initial. This information is particularly useful for identifying and categorising financial and tax-related transactions.

Who can apply for a PAN card in India, and what are the categories of individuals and entities covered under the PAN eligibility criteria?

Trusts, institutions, and NPOs/ NGOs earlier having a tax exemption under Sections 10 (23C), 12A, 12AA, 35, or 80G must reapply for the same and get a new registration under Section 12AB. Additionally, Section 12AB provides for tax exemption, grants from government or foreign agencies, and Foreign Contribution (Regulation) Act (FCRA) applications to get international funding. The new concepts of provision and permanent registrations also apply. Here are the details of both types of registrations:

Individuals:

  1. Residents: Any resident individual who earns taxable income in India, regardless of age, is eligible for a PAN.

  2. Minors: Even minors can apply for a PAN. The application can be made on their behalf by their parents or legal guardians.

Entities

  1. Companies:All registered companies, including public and private limited companies, are eligible to apply for a PAN.

  2. Partnerships:   Partnerships, including limited liability partnerships (LLPs), are eligible for PAN.

  3. Hindu Undivided Families (HUFs): HUFs can obtain a PAN.

  4. Trusts: Trusts, including charitable and non-charitable trusts, can apply for a PAN.

  5. Associations of Persons (AOPs) and Body of Individuals (BOIs):   These entities are eligible for a PAN.

  6. Government Entities: Government entities at the central and state levels are eligible for PAN.

Non Residents:

  1. Non-Resident Indians (NRIs):   NRIs with taxable income in India or engaging in financial transactions in the country are eligible for a PAN.

  2. Foreign Nationals: Foreign nationals conducting business or financial transactions in India may also apply for a PAN.

PAN for International Transactions:

For individuals or entities engaged in international transactions, having a PAN becomes crucial, especially for compliance and taxation purposes. It helps in tracking financial activities and ensuring that appropriate taxes are paid.

The eligibility for a PAN card is broad, encompassing a wide range of individuals and entities involved in financial activities in India. The application process is provided below.

How to Apply for PAN:

Applying for PAN Online:

2

Step 2:

  • Select the 'New PAN - Indian Citizen (Form 49A)' Option

  • There are two PAN forms available: Form 49A for Indian citizens and Form 49AA for foreign citizens applying for PAN allotment. Select the relevant form based on your citizenship status.

3

Step 3: Fill in the Form

  • Select the 'New PAN - Indian Citizen (Form 49A)' Option

  • There are two PAN forms available: Form 49A for Indian citizens and Form 49AA for foreign citizens applying for PAN allotment. Select the relevant form based on your citizenship status.

4

Step 4: Choose the Mode of Submission

  • Select the mode of submission, which can be 'Physical PAN Card' or 'e-PAN Card.' The electronic PAN card (e-PAN) is usually free of cost.

5

Step 5: Payment of Fees

  • Pay the applicable fee. The fee for processing a PAN application for Indian citizens was Rs. 110 (plus applicable taxes). Payment can be made through credit/debit card, net banking, or demand draft.

6

Step 6: Submit Supporting Documents

  • Upload the necessary documents as proof of identity, address, and date of birth. Ensure that the documents are clear and meet the specified requirements.

7

Step 7: Acknowledgment

  • After successful submission, you will receive an acknowledgement containing a unique 15-digit acknowledgement number. This number can be used to track the status of your PAN application.

1

Step 1: Visit the Official PAN Application Website

  • Go to the official website of the Income Tax Department or the NSDL (National Securities Depository Limited) website, which is authorised to facilitate PAN applications.

Applying for PAN for Minors:

2

Step 2: Provide Guardian's Details

  • Include details of the minor's parent or guardian. The PAN card will be issued in the minor's name but managed by the guardian until the minor turns 18.

3

Step 3: Submit the Birth Certificate

  • Select the 'New PAN - Indian Citizen (Form 49A)' Option

  • There are two PAN forms available: Form 49A for Indian citizens and Form 49AA for foreign citizens applying for PAN allotment. Select the relevant form based on your citizenship status.

4

Step 4: Fees for Minor Applicants

  • The fee for PAN application for minors is the same as for adults.  

5

Step 5: Submit Online

  • Follow the same submission process as outlined for adult applicants.

6

Step 6: Track Application Status

  • Use the acknowledgement number to track the status of the PAN application.

1

Step 1: Choose the Appropriate Form

  • For minors, the application form is 'New PAN - Indian Citizen (Form 49A)'

Step-by-Step Guide for Offline PAN Application:

2

Step 2: Fill in the Form

  • Fill out the PAN application form (Form 49A for Indian citizens) with accurate details. Ensure that the information matches the supporting documents you will submit.

3

Step 3: Attach Photographs

  • Affix two recent passport-size photographs on the form in the designated spaces. The photographs should be clear and conform to the specified guidelines.

4

Step 4: Gather Supporting Documents

  • Collect the necessary documents, such as proof of identity, address, and date of birth. The acceptable documents are listed on the PAN application form.

5

Step 5: Pay the Application Fee

  • The fee for processing a PAN application was Rs. 110 (plus applicable taxes). Payment can be made through a demand draft, cheque, or cash, depending on the guidelines provided by the service provider.

6

Step 6: Submit the Application

  • Submit the completed application form, photographs, supporting documents, and the application fee to the nearest PAN application centre. You can find the addresses of these centres on the official websites of the authorised service providers.

1

Step 1: Obtain the PAN Application Form

  • Visit the official website of the Income Tax Department or authorised service providers (like UTIITSL or NSDL) and download the PAN application form. The forms are available in PDF format.

7

Step 7: Acknowledgment

  • After applying, you should receive an acknowledgement receipt. This receipt contains a unique 15-digit acknowledgement number. This number can be used to track the status of your PAN application.

Why You Should Apply for PAN?

The PAN card is like a financial passport that helps the government keep track of all the money-related activities of individuals and businesses. It's a crucial part of the tax system, ensuring everyone pays their fair share. When you file your income taxes, having a PAN connects all your financial dots, ensuring the government knows about your earnings and transactions. It acts as a safeguard against shady financial dealings, promoting transparency.

PAN isn't just for taxes; it's needed for big-money moves like opening a bank account, buying or selling property, investing in stocks, and even applying for a credit card. It's a kind of financial ID that opens doors for various activities, including international transactions and getting government benefits. So, consider your PAN card your financial ID card, which helps you and the government keep financial matters in order.

The Income Tax Department mandates the possession of a PAN card in various circumstances, including when an individual's income exceeds Rs. 2,50,000 in a financial year when TDS is deducted from their income, when engaged in certain professions or businesses with gross receipts exceeding Rs. 5 lakhs, and in other specific financial transactions.

Apart from the Income Tax Department, various institutions require the mandatory quoting of PAN in specific transactions. Some instances include:

1. Opening: A new bank account or  DEMAT account

 

2. Applying for A credit card or debit card

 

3. Payments to:  

  • Life insurance premium exceeding Rs. 50,000 in a year

  • Mutual funds, companies, or RBI for acquiring units, debentures, or bonds when the total amount paid exceeds Rs. 50,000 in a year

4. Sale or purchase of:  

  • Immovable property for an amount exceeding Rs. 10,00,000

  • Securities or shares for an amount exceeding Rs. 1 lakh per transaction

  • Motor vehicle (excluding two-wheeled vehicles) for an amount exceeding Rs. 2 lakhs

  • Goods and services for an amount exceeding Rs. 2 lakhs per transaction

 

5. Time deposits with:  

Banking companies, post offices, Nidhi companies, or any NBFC exceeding Rs. 50,000 in a day or Rs. 5 lakhs in a year

 

6. Payments in cash:  

To hotels and restaurants for bills exceeding Rs. 50,000

For the purchase of bank drafts, pay orders, or banker's cheques from a banking company or cooperative bank exceeding Rs. 50,000 in a day

 

7. Cash deposit of Rs. 50,000 or more with any bank in one day  

 

8. Payment for travel to any foreign country or purchase of foreign currency exceeding Rs. 50,000  

Having a PAN card is not only a requirement by the Income Tax Department but is also essential for seamless financial transactions and dealings with various institutions.

Why Should an NRI Apply for PAN?

1. Applying for a credit card or debit card:

 Financial institutions require individuals to provide their PAN when applying for credit or debit cards. This ensures transparency and helps in assessing the applicant's financial background.

2. Payments in cash to hotels and restaurants for bills exceeding Rs. 50,000:

 Financial institutions require individuals to provide their PAN when applying for credit or debit cards. This ensures transparency and helps in assessing the applicant's financial background.

3. Payment in connection with travel to any foreign country or for the purchase of foreign currency exceeding Rs. 50,000:

For international travel-related transactions, including the purchase of foreign currency, providing PAN is mandatory when the transaction amount exceeds Rs. 50,000. This helps monitor foreign exchange dealings.

4. Payment in cash for an amount exceeding Rs. 50,000 during any one day for the purchase of bank drafts/pay orders/banker's cheques:

When purchasing bank drafts, pay orders, or banker's cheques with cash exceeding Rs. 50,000 in a single day from a banking company or a co-operative bank, individuals are required to provide their PAN.

5. Payment of an amount exceeding Rs. 50,000/  to RBI for acquiring the bonds issued by it:

Acquiring bonds issued by the Reserve Bank of India (RBI) with a payment exceeding Rs. 50,000 necessitates the quoting of PAN. This ensures transparency in financial transactions related to government securities.

6. Sale or purchase of goods and services exceeding an amount of Rs. 2 lakhs per transaction:

 PAN is mandatory for transactions involving the sale or purchase of goods and services when the transaction amount exceeds Rs. 2 lakhs. This applies to a wide range of commercial activities.

7. Payment in cash or by way of a bank draft / pay order/banker's cheque exceeding Rs. 50,000 in a financial year for one or more pre-paid payment instruments:

When making payments exceeding Rs. 50,000 in a financial year for pre-paid payment instruments issued by the Reserve Bank of India to a banking company, co-operative bank, or any other company or institution, PAN details must be provided.

What if anyone holds 2 PAN Cards?

Individuals cannot hold multiple Permanent Account Number (PAN) cards. The PAN is a unique identification number issued by the Income Tax Department in India, and having multiple PAN cards is against the rules and could lead to legal consequences.

Obtaining more than one PAN card could be accidental, such as if an individual applies for a new PAN card without realising they already have one. In such cases, it's essential to surrender or deactivate the additional PAN card to avoid any complications.

If a person is found to be intentionally holding multiple PAN cards, it can lead to legal action, penalties, and difficulties in financial transactions and tax compliance. It is crucial for individuals to ensure that they have only one active and valid PAN card, and if any discrepancies are identified, they should rectify the situation by surrendering or deactivating the extra PAN card.

Is linking PAN in various financial transactions and services compulsory, and what are some instances where linking PAN is typically required?

Linking your Permanent Account Number (PAN) with various financial instruments and services is often mandatory. However, the specific requirements can change, and checking for the most recent updates is always advisable.

 

Here are some instances where linking PAN is typically required:

1. Bank Accounts:

Banks often require customers to link their PAN with their bank accounts. This is part of the government's efforts to curb tax evasion and monitor financial transactions.

 2. Income Tax Returns (ITR):

PAN is crucial when filing income tax returns. It's used as an identifier, and you must provide your PAN details while filing your taxes.

3. Demat Accounts:

If you are involved in trading or investing in the stock market and have a Demat account, linking your PAN is usually mandatory.

4. Mutual Funds:

Mutual fund investments often require linking PAN. This ensures that the investments and returns are correctly associated with the individual for taxation purposes.

5. Real Estate Transactions:

PAN is commonly required for real estate transactions, such as buying or selling property.

6. Credit Card Applications:

When applying for a credit card, financial institutions may request your PAN for identification purposes.

7. Cash Transactions:

In various transactions, especially high-value ones, businesses may request your PAN details. This is part of efforts to track and curb large cash transactions.

It's essential to stay informed about the latest regulations, as the requirements for linking PAN can change. The government periodically announces updates to financial and tax regulations, and these may impact the necessity of linking your PAN with different services. Always refer to official government communications or consult with financial institutions for the most accurate and up-to-date information.

Penalty for Not Linking PAN with Aadhaar:

If an individual fails to link their PAN with Aadhaar by the specified deadline, the PAN may be declared "inoperative," and the individual may face penalties under Section 272B of the Income Tax Act. As of the last update, the penalty for not linking PAN with Aadhaar is Rs. 10,000.

I have lost my PAN card. How do I get it re-issued?

If you have lost your PAN card, you can apply for a reissue by following these steps:

  1. Visit the official website of the PAN service provider, NSDL.

  2. Fill out the PAN card reissue application form, known as Form for 'Request for New PAN Card or/and Changes or Correction in PAN Data.'

  3. Submit the required documents, such as proof of identity and address, along with a copy of the FIR (First Information Report) if the card was lost.

  4. Pay the applicable fee.

  5. Track the status of your application using the acknowledgement number provided.

How do I correct any mistake or change any data on my PAN card?

To correct any mistake or change data on your PAN card, you can follow these steps:

Access the PAN Correction Form:

Use the online application form for PAN correction, known as "Request for New PAN Card or/and Changes or Correction in PAN Data." This form is available on the official websites of the PAN service providers, UTIITSL and NSDL.

Fill Out the Form:

Provide accurate details in the form, including the necessary corrections or changes. You should fill in the details exactly as you want them to appear on the corrected PAN card.

Supporting Documents:

Attach the required supporting documents to validate the changes or corrections. The documents needed may vary depending on the nature of the correction. For example, if you are changing your name, you may need to provide a copy of your marriage certificate or gazette notification.

Submission:

Submit the completed form along with the supporting documents to the PAN service provider's office. You can typically submit the form online or at designated physical centers.

Payment of Fee:

Pay the applicable fee for the correction. The fee amount may depend on whether the correction is a minor one or a significant change.

Acknowledgement:

After submission, you will receive an acknowledgement receipt with a unique acknowledgement number. Use this number to track the status of your application.

Track Application Status:

Monitor the status of your application online using the acknowledgment number. The status can be tracked on the official websites of UTIITSL or NSDL.

Receipt of Corrected PAN Card:

Once the correction process is complete, you will receive the corrected PAN card at the address provided in your application.

What happens in case of any contravention relating to PAN?

In case of any contravention relating to PAN (Permanent Account Number), the Income Tax Department may take appropriate actions, and the consequences can vary depending on the nature of the contravention. Here are some common scenarios and potential outcomes:

Providing False Information:

If false information is provided during the PAN application process or any subsequent update, it can lead to penalties or legal consequences. The tax authorities may take action to rectify the information and impose penalties on the individual involved.

Misuse of PAN:

Misusing someone else's PAN or engaging in fraudulent activities using a PAN card may lead to legal consequences. The Income Tax Department may investigate such cases, and individuals found guilty of misuse may face penalties, fines, or legal action.

Fake PAN Cards:

Manufacturing or using fake PAN cards is illegal and can result in severe penalties, including imprisonment. The authorities may take legal action against individuals involved in the creation, distribution, or use of counterfeit PAN cards.

Non-Compliance with Regulatory Requirements:

Failure to comply with regulatory requirements, such as linking PAN with Aadhaar as mandated by the government, may lead to consequences. The individual may face penalties or other actions specified by tax authorities.

Non-Disclosure of Income:

If an individual fails to disclose income or provides inaccurate details in financial transactions linked to PAN, it may be considered a contravention. This could lead to tax assessments, penalties, and potential legal action.

Frequently asked questions

Q

 How long does it take to get a PAN after applying?

A

Typically, the processing time for PAN applications is 15 working days. However, it may vary depending on factors such as the mode of application and the accuracy of the information provided.

Q

How can I check the status of my PAN application? 

A

You can check the status of your PAN application on the official website of the Income Tax Department or through the TIN NSDL website using the acknowledgement number provided during the application.

Q

What is the helpline number for NSDL if I have queries regarding my PAN application? 

A

You can contact the NSDL helpline at 020-27218080 or the toll-free number 1800220306 for any assistance related to PAN applications.

Q

Can I change my PAN card details after it is issued?

A

Yes, you can request changes or corrections to your PAN details through the online correction facility provided by NSDL or UTITSL.

Q

What is the fee for applying for a PAN card?

A

The fee for applying for a PAN card depends on the communication address provided. For Indian addresses, the fee is Rs. 93, and for foreign addresses, it is Rs. 864.

Q

How can I contact NSDL for assistance with my PAN-related concerns?

A

You can reach out to NSDL through their customer care services at https://www.protean-tinpan.com/customerfeedback.html for queries, feedback, or assistance.

Q

What happens if any contravention or violation related to PAN exists?

A

Contraventions related to PAN, such as providing false information, can result in penalties or legal action. It is essential to provide accurate and truthful information during the application process.

Q

Can I surrender my PAN card if I no longer require it?

A

Yes, you can surrender your PAN card if it is no longer needed. You can submit a request for surrender along with the reasons for surrendering.

Q

Is PAN mandatory for all financial transactions? 

A

PAN is mandatory for various high-value financial transactions, as the Income Tax Department specifies. It helps track and monitor significant financial activities.

Q

Can I use my PAN card as proof of identity for international travel?

A

While PAN is a valid proof of identity in India, it is not generally accepted as an international travel document. It is advisable to use a passport for such purposes.

Q

Is PAN ID different from other government-issued identification proofs?

A

Yes, PAN ID is different. PAN (Permanent Account Number) is issued for income tax purposes, while other ID proofs, such as Aadhaar or passport, serve different identification purposes.

Q

Can an NRI apply for a PAN card?  

A

NRIs can apply for a PAN card if they have taxable income in India or engage in financial transactions requiring PAN.

Q

Can I apply for a PAN card if I am a foreign national residing in India?

A

 Yes, foreign nationals residing in India can apply for a PAN card if they have taxable income there.

Q

Can I apply for a PAN card online? 

A

Yes, the online application for a PAN card can be submitted through the official websites of NSDL or UTITSL.

Q

What documents are required for PAN card application? 

A

The documents required for PAN application include proof of identity, proof of address, and proof of date of birth. The documents may vary based on the applicant's status (individual, company, etc.).

Q

Can I apply for a PAN on behalf of someone else?

A

Yes, you can apply for a PAN (Permanent Account Number) on behalf of someone else. The process typically involves filling out the PAN application form, submitting the required documents, and providing the necessary details of the person for whom you are applying. However, it's important to ensure that you have the proper authorisation and documentation to complete the application on their behalf. Additionally, the person for whom you are applying must provide their signature on the application form where required.

Q

Can I apply for a PAN on behalf of someone else?

A

Yes, you can apply for a PAN (Permanent Account Number) on behalf of someone else. The process typically involves filling out the PAN application form, submitting the required documents, and providing the necessary details of the person for whom you are applying. However, it's important to ensure that you have the proper authorisation and documentation to complete the application on their behalf. Additionally, the person for whom you are applying must provide their signature on the application form where required.

Q

I applied for a PAN some time ago and haven't received it yet; what should I do?

A

If you've applied for a PAN and haven't received it, check the application status online using the acknowledgement number. Contact the PAN service providers ( NSDL), visit a local PAN centre, or inquire with the courier service if applicable. If needed, consider resending the application or directly contacting the income tax department for assistance.

Prachi Jain

Chartered Accountant

Prachi Jain is a Chartered Accountant with a passion for simplifying finance and tax-related matters through her insightful and informative blogs. With a background in finance and a deep understanding of tax regulations, Prachi has established herself as a trusted source of financial wisdom. Prachi is committed to empowering her readers with the knowledge they need to make informed financial decisions. Her expertise and dedication shine through in every blog post, helping her audience navigate the intricacies of finance and taxes with confidence. Follow Prachi Jain's blog for practical insights and guidance on managing your finances effectively.