PAN Card - Permanent Account Number (PAN) in India

Permanent Account Number or PAN is a means of identifying various taxpayers in the country. PAN is a 10-digit unique identification alphanumeric number (containing both alphabets and numbers) assigned to Indians, mostly to those who pay tax.

The PAN system of identification is a computer-based system that assigns unique identification number to every Indian tax paying entity. Through this method, all tax-related information for a person is recorded against a single PAN number which acts as the primary key for storage of information. This is shared across the country and hence no two people on tax paying entities can have the same PAN.

When PAN is allotted to an entity, PAN Card too is given by the Income Tax Department. While PAN is a number, PAN Card is a physical card that has your PAN as well as name, date of birth (DoB), and photograph. Copies of this card can be submitted as proof of identity or DoB.

Your PAN Card is valid for lifetime because it is unaffected by any change in address.

How to Apply for PAN Card

PAN Card application can be made online on one of the following websites:

NSDL

UTIITSL

You can also apply offline at any of the district-level PAN agencies. You can apply for a new PAN as well as make correction or change information yourself. You can even request for a duplicate PAN Card or reprint the card if you lose the original.

For new PAN, Indian citizens and NRIs (including companies, NGOs, partnership firms, local bodies, trusts, etc.) need to fill Form 49A. Foreigners and foreign entities need to use Form 49AA. These forms, along with all the required PAN documents , should be submitted to the Income Tax PAN Services Unit.

Once you apply for a new or duplicate PAN, or request for corrections/changes, you can track the status of PAN application via the acknowledgement number provided.

As per the NSDL website, the entire process of printing and dispatching cards takes approximately 2 weeks or 14 days.

PAN Card Application Do's and Don'ts

• Fill in all the details as per the identity and address proof documents you are submitting.
• Get your thumb impression attested by a Magistrate/Notary before submitting the form, to avoid disqualification.
• Write the complete address and provide accurate contact details in the form.
• Fill in the application form in capital letters.
• Don't make corrections or over-write anywhere on the form.
• Do not use initials in the first name or last name columns.
• Do not apply for a new PAN card if your old PAN card is lost/stolen/defaced. Request for a duplicate PAN instead.

Why Is PAN Important? – Uses and Benefits of Having PAN Card

PAN Card is important for taxpayers as it is necessary for all financial transactions and is used to track the inflow and outflow of your money. It is important when paying income tax, receiving tax refunds, and receiving communication from the Income Tax Department.

The Indian Budget 2019 proposed that individuals who do not have a PAN can use their Aadhaar number to file returns and for any other purpose where PAN was earlier mandatory. This means that if you have not link pan with aadhar yet, or do not have a PAN but have an Aadhaar, you don't have to either link PAN and Aadhaar, or apply for a new PAN. However, the rules about this are still in the process of creation/updation/approval.

That said, PAN continues to be necessary for a large number of monetary transactions. PAN Card also serves as a proof of identity. Given below are some of the uses and advantages of having a PAN.

Uses of PAN in Financial Transactions

• PAN needs to be quoted while paying direct taxes.
• Taxpayers need to input their PAN when paying income tax.
• While registering a business, PAN information needs to be furnished.
• A lot of financial transactions require PAN information. Some of these transactions are:
• Sale or purchase of property (immovable) which is valued at Rs.5 lakh or above
• Sale or purchase of a vehicle except a two-wheeler
• Payments made towards hotels and restaurants and which are above Rs.25,000
• Payments made in connection with travel requirements to other countries. The amount in this case if it exceeds Rs.25,000, then you need to quote your PAN
• Payments of more than Rs.50,000 towards bank deposits
• Purchase of bonds worth Rs.50,000 or more
• Purchase of shares worth Rs.50,000 or more
• Purchase of insurance policy worth Rs.50,000 or more
• Purchase of mutual fund schemes
• Payments made for more than Rs.5 lakh towards purchase of jewellery and bullion
• To remit money out of India
• Transfer of funds from NRE to NRO account

General Uses/Advantages of Having PAN

• Since PAN Card contains information such as Name, Age and photograph, it can be used throughout the country as a valid identity proof.
• PAN is the best possible way to keep track of your tax payment. Otherwise, you might be required to pay it multiples times since your tax payment cannot be verified.
• Since PAN is unique for every entity, its misuse is almost impossible for purposes of tax evasion or other devious means.
• PAN Card can be used to avail utility connections such as electricity, telephone, LPG, and internet.

Who Should Get PAN? – PAN Card Eligibility

Under section 139A of the Income Tax Act, the following taxpaying entities are required to have a Permanent Account Number:

• Any person who has paid tax or is liable to pay tax to the Income Tax Department. This will be decided based on the tax slabs.
• Any person who is carrying out a business or professional practice which earns him a yearly turnover of more than Rs.5 lakh in any year of assessment.
• Importers and exporters who are liable to pay any form of tax or duty charges as per the Income Tax Act or as per any prevalent law
• All kinds of trusts, charitable organisations, and associations. All tax paying entities – minors, individuals, HUFs, partnerships, companies, body of individuals, trusts, and others – should apply for PAN.

Tracking PAN Transactions

The government recently unveiled a programme by which it can track transactions made through a PAN card for the purpose of calculating tax. Known as the Income Tax Business Application-Permanent Account Number or ITBAN-PAN, it will enable the Income Tax Department to track every transaction made where a particular PAN number was quoted.

• All financial transactions such as mergers, acquisitions, liquidation, and amalgamation of PAN as well as dissolution information where a particular PAN card was quoted can be traced through the software.
• All existing PAN information and the entire database of PAN information has also been moved to this software.

What happens if you don't have PAN Card?

If your income falls in the taxable bracket, not having a PAN card would result in:

• Flat 30% tax on your earnings and wealth, as stipulated by the Income Tax Department of India. This rule applies to individuals, companies and all entities eligible for tax, including foreign nationals and firms registered outside India.
• Not being able to purchase a motor vehicle, buy immovable property worth over Rs. 10 lakh, or open a bank account, among other activities.
• Businesses unable to conduct a large chunk of their financial activities and procurement.

*Please note that these rules may change once Aadhaar and PAN become interchange

New Design of PAN Cards

The Income Tax Department has prescribed a new format for PAN Cards issued after 1 January 2017. The changes made to the new PAN Card have been listed below:

• A Quick Response (QR) code has been printed onto the new PAN Card which will carry details of the card holder. This QR code can be used for verification of data.
• New sections for the name of the card holder, the card holder's father's name, and date of birth have been added.
• The location of the PAN and the signature of the card holder have been changed.

PAN Card Forms

In order to apply for a PAN card, an application form has to be filled out. There are two types of application forms – Form 49A and Form 49AA. Both the forms can be availed through both online and offline platforms.

• Form 49A: The Form 49A is used by Indian individuals or entities to apply for a PAN card. Students and minors can also apply for PAN using this form.
• Form 49AA: The Form 49AA is the application form for PAN which is used in the case of foreigners.

The Cost of PAN Application

An individual can make an online application for his or her PAN card. This can be done through the NSDL website or the UTITSL portal. The cost of application for PAN can be summed as follows:

• For Indian communication address: Rs.93 (excluding GST)
• For foreign communication address: Rs.864 (excluding GST)

How to make Changes or corrections in PAN Card

Given below are the steps you will have to follow if you wish to make changes or correction to your Pan Card online:

• You can visit the NSDL website and under ‘Services’, click on PAN.
• Scroll down and under ‘Change/Correction in PAN Data’, click on ‘Apply’.
• Under ‘Application Type’, select ‘Changes/Correction in PAN Data’.
• Enter the other details, and click on Submit’.
• You will get a token number which you can use later for tracking purposes.
• Continue to the application form where you will have to state the changes or correction in PAN Card. Provide the new details and make a payment of Rs.93 and submit the form.
• You will have to send the required documents as proof via post to NSDL. The documents you will most likely have to submit will be proof of address, proof of identity, and the proof of document showing the change you wish to make in your PAN Card.
• Your application form will be processed and if the documents submitted by you are correct, those changes will be incorporated in your PAN Card.
• Once those changes are incorporated, the new PAN Card will be dispatched to your communication address which you will receive within 15 days.

How to apply for PAN Card Offline

Given below are the steps you will have to follow if you wish to apply for PAN Card offline

• Visit the official website of TIN-NSDL by clicking on the link https://www.tin-nsdl.com/.
• On the main page, under the “Downloads’ section, click on ‘PAN’. You will be directed to a new page.
• Click on ‘Form 49A’.
• The Form 49A application form will appear on your computer screen in the pdf format. Download the form and take a print out.
• Fill the form and make sure all the details entered by you are correct.
• Make sure you attach all the necessary documents including your passport size photograph.
• You will have to pay the registration fee which can be paid via demand draft in favor of ‘NSDL – PAN’ payable at Mumbai. You will have pay Rs.115.90.
• Enclose the application form and photocopies of your documents in an envelope. Make sure you mention ‘APPLICATION FOR PAN-N-Acknowledgement Number’ on the envelope and send it to the address

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 – 411016.

You will later receive an application number which you can use to track the status of your PAN Card application.

Documents Required to apply for a PAN Card

In order to apply for PAN Card, you will have to submit a host of documents including Form 49A or 49AA. Given below is the list of documents you will have to submit while applying for a PAN Card:

If you are an individual applicant

• Proof of identity such as Aadhaar, Voter ID, Driving License, etc.
• Proof of address such as 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 you belong to a Hindu Undivided Family (HUF)

• You will have to submit an affidavit issued by the Karta of the HUF. The affidavit must clearly mention the name, address, and every coparcener father’s name.
• If you belong to HUF and is individually applying for a PAN Card, then you will have to submit the proof of identity, proof of address, and date of birth proof.

For companies registered in India

• A copy of the Registration Certificate issued by the Registrar of Companies is to be submitted.

Firms and Limited Liability Partnerships registered or formed in India

• A copy of the Registration Certificate issued by the Registrar of Companies is to be submitted.
• A copy of the Partnership Deed is to be submitted.

For Trusts formed or registered in India

• You will have to submit a copy of the Registration Certificate Number issued by a Charity Commissioner.

For Association of Persons

• Agreement Copy or Registration Number Certificate issued by the Registrar of Co-operative Society or Charity Commissioner, or any document issued by the Central or State Government which clearly mentions your address and identity.

Applicants who are not Citizens of India

• Proof of identity such as a Copy of PIO issued by the Government of India, Copy of OCI issued by the Government of India, Passport Copy, etc.
• Proof of Address can be bank statement of the residential country, NRE Bank statement, Copy of VISA granted by an Indian company, registration certificate issued by FRO, etc.

How to apply for a Duplicate PAN Card if you have Lost your Original PAN Card

You will have to follow the steps given below to order for a duplicate PAN Card if you have lost your Original PAN Card:

• Visit the TIN-NSDL or UTIITSL website to apply for a duplicate PAN Card.
• If you are a citizen of India then you will have to submit Form 49A, otherwise Form 49AA if you are a foreigner.
• Complete the payment required to apply for a duplicate PAN Card. You can also make the payment via demand draft.
• Take the printout of the form and send to the address given below:

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.

• It will take up to 45 days for you to receive your duplicate PAN Card.

PAN Card Enquiry/ PAN Card Tracking/ PAN Card Online Status Check

• The status of your PAN Card can be checked online after you have submitted the application for it.
• The application status will show you whether the card has been issued or is in transit.
• You can check the status of your PAN Card application on either TIN-NSDL or UTIITSL website.
• You can figure out the status of your PAN Card application with your name and date of birth entered on the website.

Who Issues PAN Card?

PAN Card is issued by the Income Tax Department with help from authorised district-level PAN agencies, UTI ITSL (UTI Infrastructure Technology and Services Limited), and NSDL (National Securities Depository Limited). There are several TIN-Facilitation Centres and PAN centres across the country, run by NSDL that help citizens get their PAN Card.

The process of issuing of PAN works on the PPP (Public Private Partnership) model. This is done to maintain economy, efficiency, and effectiveness of managing, processing, and issuing PAN applications.

How is PAN Allotted?

• Once you submit your PAN application with the filled-up form and supporting documents, the PAN Centre verifies it against the original documents.
• For online process, you need to submit the form online and then send self-attested photocopies of the documents to NSDL, Pune.
• Assessing Officers assess the application details. Your details will be cross-verified against the details of existing PAN Card holders in the central database.
• In case there is no record of a previous PAN allotted to you, then the request is accepted and processed. A PAN is allotted to you as per your taxpayer classification.

What do the Alphabets and Numbers on your PAN Card Mean?

Your Permanent Account Number is not a series of random numbers and letters. The structure of PAN is actually quite interesting. Here's what each component of PAN means:

• First Three Characters: These are a sequence of alphabets from AAA to ZZZ.
• Fourth Character: The fourth character signifies the type of taxpayer that you are.
• A - Association of Persons (AOP)
• B - Body of Individuals (BOI)
• C - Company
• F - Firm/Limited Liability Partnership
• G - Government Agency
• H - HUF (Hindu Undivided Family)
• L - Local Authority
• J - Artificial Judicial Person
• P - Individual
• T - Trust
• Fifth Character: The fifth character in PAN is the first letter of your surname. So, if a person is named 'Rajesh Khanna', the fifth character of his PAN will be 'K'.
• Sixth to Ninth Characters: This is from a sequence of numbers between 0001 and 9999.
• Last Characters: This is an alphabet check letter.

Types of PAN Cards

PAN cards are issued to different tax-paying entities. Based on that, the types of PAN are:

1. PAN Card for Indian Individuals
2. PAN Card for Indian Companies
3. PAN for Foreign Citizens
4. PAN for Foreign Companies

PAN Cards issued to individuals have the person's photograph, name, father's name, date of birth, signature, an authenticity hologram, QR Code, date of issue of the PAN, and the Permanent Account Number. PAN Cards issued to companies have the name of the company, its date of registration, the PAN number, hologram, QR Code, and date of issue of PAN. It will not have a photograph or signature.

History of PAN in India

Before the concept of PAN was introduced, there was a GIR number assigned to taxpayers. This was basically a manual system and was unique only within a ward or under a particular assessing officer. However, the number was not unique at the country level. Since GIR unique not unique, there could be higher chances of miscalculation and errors, or cases of mistaken identity during tax assessment.

The GIR number was allotted by the Assessing Officer to a tax payer and it included the Assessing Officer's information as well.

In the year 1972, the concept of PAN was rolled out by the Indian government and was made statutory under section 139A of the Income Tax Act, 1961. Initially a voluntary process, PAN was made mandatory for all tax paying individuals in 1976.

The initial PAN number allotments were made manually, and to avoid duplication, each ward/circle received a certain set of numbers. This series was abandoned in the year 1995.

Structure of PAN Card

As per the guidelines of Know Your Customer or KYC, the details furnished on a PAN card are as follows:

1. Name of the cardholder
2. Father’s name of the cardholder
3. Date of Birth of the cardholder
4. 10-character alphanumeric Permanent Account Number or PAN
5. Signature of the cardholder
6. Photograph of the cardholder
7. The PAN card also comes with the logo and hologram of the Government of India along with a tag of the Income Tax Department (ITD).

Understanding the Permanent Account Number (PAN)

As mentioned above, the PAN is a combination of 10 characters. This combination can be explained as follows:

• The first 3 characters are alphabetic and can be any combination from the English alphabet.
• The fourth character is also an alphabet which denotes the category of the taxpayer. The categories are as follows:
• A – Association of Persons
• B – Body of Individuals
• C – Company
• F – Firms
• G – Government
• H – Hindu Undivided Family
• L – Local Authority
• J – Artificial Judicial Person
• P – Individual
• T – Association of Persons for a Trust
• The fifth character is also an alphabet and it denotes the first character of the cardholder’s surname.
• The next four characters are numeric and are random in nature.
• The last character is an alphabet again.

Old PAN Series

In spite of these changes, the first avatar of the PAN card met with some difficulties, as mentioned below:

• There was no database to maintain records of the PAN number allotted, with very limited information being recorded.
• The data that was stored for PAN holders was neither structured well nor did it capture detailed information except a few primary details like name, address, etc.
• There was no centralised authority who issued the PAN cards, resulting in the possibility that different centres could allot the same number to different individuals in the country.
• The PAN number was not a permanent one as the number changed depending on the holder's address.

New PAN Series

In 1995, under an amended section 139A of the Income Tax Act, the new series of PAN was rolled out by the Income Tax Department. The new PAN series facilitated the following points which were earlier not included in the old series of PAN:

• Linking of all tax-related information, current as well as past, to a single identification number.
• Easy retrieval of information from the central database. With the launch of the new PAN series, the segregation and recording of data was done more effectively.
• Matching all financial information mapped against a single PAN, so that all loan details, credit and debit details as well as investment details could be tracked and thereby help prevent tax evasion.

Concepts Similar to PAN Card

The concept of PAN, or a unique number assigned to every tax paying entity, is not a new concept. In fact, there are a number of similar such utilities that are used for tax purposes.

TAN (Tax Deduction and Collection Account Number) - This is a unique 10-digit number that is issued to individuals and entities who have to collect or deduct tax on payments made as part of tax Deducted at Source (TDS) under the Income Tax Act. TAN has to be quoted when applying for TDS or Tax Collected at Source (TCS) challans made to disburse the refund as well as on certificates. Failure to quote the TAN would result in a fine of Rs. 10, 000.

TIN (Taxpayer Identification Number) - TIN number is a unique 11-digit number that is used to identify dealers who are registered under Value Added Tax. Allotted by individual states, it is compulsory for all manufacturers, traders and dealers to register for a TIN number. This number is to be quoted when generating invoices, orders or quotations by both the issuing as well as the receiving company. It is also used to identify assesses under the Income tax Act of 1961.

Permanent Account Number (PAN) for e-KYC

You can use your PAN for e-KYC. e-KYC is a major requirement which is asked for by most service providers and it offers a number of benefits. Some of the benefits of the PAN e-KYC can be summed up as follows:

1. Quick processing: With the help of PAN e-KYC, you can share information with a service provider within a few minutes through dedicated and secured channels. This helps in making the processing quicker.
2. Hassle-free: As it is a paperless process, the PAN e-KYC enable hassle-free management of documents and information.
3. Authorisation: The data which is shared through PAN e-KYC is authentic data. This data is legal and nationally acceptable for the parties who are involved in the transaction.
4. Secured data: The data transferred between the cardholder and the service provider cannot be tampered as they are transferred through secure channels only. In addition to that, the data cannot be used without the consent of both the parties who are involved in this process.

However, it is mandatory to link your Aadhaar and your PAN for the purpose of e-KYC and verification which helps you avail the services and benefits from different service providers.