- Pan Card Income Tax
- Types of PAN Card
- Eligibility for PAN Card Income Tax
- Income Tax Department PAN Card
- Benefits of PAN Card for individuals under Income Tax Act
- Importance of PAN for Income Tax Department
- Required Documents for PAN
- Structure of PAN Card Income Tax
- How to enroll for a PAN Card?
- How to update/ edit PAN details?
- Things to know before you apply or update your PAN
- New Income Tax PAN Card Rules
- How to track your PAN application?
- Frequently Asked Questions
Pan Card Income Tax
Permanent Account Number PAN is an identification number provided to taxpayers. It is an electronic system through which all tax-related information related to every taxpayer is recorded. It also acts as a primary and sole system to gather and store all tax information. Each transaction is mapped to each PAN. Hence, no taxpayer can hold more than one PAN.
Types of PAN Card
the following are the types of PAN in India:
- HUF-Hindu undivided family
Eligibility for PAN Card Income Tax
A taxpayer being an individual, company, non-resident Indian, and other taxpayers who pay taxes
Income Tax Department PAN Card
The Income-tax Department has made it mandatory for every individual to hold a PAN. The individual may be an income-earning taxpayer or a non-earning taxpayer. The PAN allows the Income Tax Department to provide a unique identity to each taxpayer. Here, the unique identity is mapped to income earned under each head of income, and the applicable tax bracket.
The Income Tax Act, 1961 also mandates quoting on PAN in multiple financial transactions in order to identify the income, expense, and deduction. For example- Under section 80G any taxpayer making any donation must quote PAN in order to claim a deduction. Likewise, it also mandates quoting PAN for any investment made in ELSS mutual funds to claim a deduction u/s 80C of the Income tax Act.
Benefits of PAN Card for individuals under Income Tax Act
The following are the benefits of PAN card under Income Tax for individuals:
- Income Tax transactions with a unique identity
- Income Tax Return filings
- Used as a valid proof of identity or a valid photo ID proof
- Make deposits in excess of Rs 50000
- Sell or purchase immovable property within the country
- Purchase banker’s draft DD, cheque, and pay orders
- Purchase shares or debentures valuing more than Rs 1 lakh
- Open a Demat account, bank account and get a credit card
- Open bank account for a minor
- Enter into financial transactions
- To enter into financial transactions for non-residents
Importance of PAN for Income Tax Department
PAN enables the Income Tax Department to track the financial transactions of taxpayers, basis the information collected, and estimate the tax bracket for the taxpayer. This tracking plays a major role in the processing of the income tax returns. While processing ITR, the actual information submitted by taxpayers is matched with the transactions available with the IT authorities.
The following are the benefits for the income tax authorities:
- Since the PAN holds the information about the taxpayer, it acts as an identification proof of the taxpayer. For example- with the date of birth income tax department can identify whether the taxpayer is a senior citizen or a super senior citizen
- The PAN is unique to each taxpayer and therefore the chances of misuse or malpractice are at minimal
- PAN helps in determining the applicable income tax rate for the taxpayers. The taxpayers with no PAN are hence liable for a flat 20% tax rate irrespective of the tax slab applicable to them.
Required Documents for PAN
Basically, an applicant needs proof of identity and proof of address to apply. The following are the required documents for PAN
|Taxpayer||Documents For PAN|
|Individual||Proof of Address & IdentityAadhar CardPassportVoter IDDriving License|
|Hindu undivided family (HUF)||Proof of Address & IdentityAffidavit of the HUF (issued by the Head of HUF)|
|Firms/Partnerships (LLP)||Limited Liability Partnerships DeedPartnership DeedCertificate of Registration (issued by Registrar of Firms)|
|Company||Certificate of Registration (issued by Registrar of Companies)|
|Society||Certificate of Registration (issued Registrar of Co-operative Society or Charity Commissioner)|
|Trust||Photocopy of Trust DeedCertificate of Registration (issued by a Charity Commissioner)|
|Foreigners||PIO/ OCI card (issued by the Indian Government)PassportNRE bank statement in IndiaBank statement (Bank of the residential country)|
Structure of PAN Card Income Tax
The structure of the PAN is given below:
- Name of the cardholder
- Company/ HUF/ Firm- The registered name of the company
- Individual- The structure is the First name, Middle name then Surname
- Name of the father of the cardholder
- Applicable only in case of individuals
- Date of Birth
- Company/ HUF/ Firm- date of registration
- Individual- date of birth
- PAN Number
- A 10 letter alpha-numeric number. Each number representing distinct information about the cardholder
- Signature of the cardholder
- The card also contains the signature of the cardholder. This signature acts as proof of the signature. The signature helps in the authentication of financial documents/ transactions.
- Photograph of the cardholder
- Company/ HUF/ Firm- No photograph
- Individual- Photograph present on the card. Further, PAN acts as a photo identity proof as well for the individuals
Let us now check the structure of the PAN number in-detail:
- First Three Letter: Alphabetical in nature containing 3 letters from A to Z
- Fourth Letter: The fourth letter represents the type or category of the taxpayer. Each category along with the alphabet is mentioned below:
- 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
How to enroll for a PAN Card?
You can enroll for PAN online or offline. Refer to the following steps for both the ways.
Online PAN Application:
- Visit NSDL or UTIITSL website
- Fill the online PAN application form, submit the form and pay the fee
- The PAN will be processed and despatched to the applicant within 15 days
- Collect the application form from the PAN authorized center
- Fill the application form, submit the form and pay the fee
- Finally, the PAN will be processed and despatched to the applicant within 15 days
How to update/ edit PAN details?
You can follow the below-mentioned steps to update or edit the online PAN details”
- Visit NSDL website
- Select ‘Changes or Correction in existing PAN DATA’.
- Update the details
- Submit the proof of address and proof of identity documents.
- Finally, on successful PAN verification, the data will be updated.
Things to know before you apply or update your PAN
- Know your PAN Income Tax Format
- Fill the form in capital letters only
- Fill the form with current and updated information
- Ensure the mobile number mentioned in the form is correct and active
- All the field are mandatory to fill
- Fill the form in English or the local language used at the time of filling the form
- No salutations like Mr / Mrs / Ms / Dr
- Ensure full and correct address for the delivery of the PAN card
- Make sure your self attest each supporting document
- While signing supporting documents ensure that the signature on the form and documents match
- Know your income tax PAN application and track PAN card status by visiting the NSDL website. Ensure you know provide valid documents a successful PAN verification
New Income Tax PAN Card Rules
The Ministry of Finance, Government of India has made few amendments to the PAN rules. The following are such amendments to income tax PAN card :
- Furnish PAN number while making transaction such as foreign travel or hotel bills in excess of Rs 50000
- Quote PAN number for every financial transaction in excess of Rs 2,00,000. The transaction such as the purchase of silver or gold worth more than Rs 2,00,000.
- Mandatory furnishing of PAN while purchasing an immovable property valuing Rs 10 lakhs or more
- Quote PAN number while investing a lumpsum of Rs 50,000 or more in a term deposit.
- Quote PAN number while investing periodically in a term deposit valuing more than Rs 5,00,000. The investment is made with NBFCs, Banks, Post Offices, or other financial institutions.
- Mandatory to quote while opening any kind of bank account with any bank. However, it is not mandatory to quote while opening a Pradhan Mantri Jan Dhan Yojana account.
- Mandatory to quote while making payment of LIC premium in excess of Rs 50,000.
- Compulsory to quote to make a cash deposit, buy bankers cheque/pay orders/bank draft worth Rs 50,000 or more
- Compulsory to quote while purchasing shares of unlisted companies worth Rs 1 lakh or more.
How to track your PAN application?
You can easily track your PAN application by visiting the NSDL website. All you need to do is enter your application type and acknowledgment number. Here, the application type will be ‘PAN New/ Change Request’ for PAN application and ‘TAN New/ Change Request’ for TAN application. You will find your acknowledgment number in the application response from NSDL.
Frequently Asked Questions
In case you have lost your PAN card, you can apply either online or offline for a duplicate PAN card. You need to visit the NSDL or UTIITSL website. The Indian citizen will have to submit Form-49A and the non-resident will have to fill Form-49AA along with a fee. The duplicate PAN card will be dispatched to you within 45 days.
You can correct the details by visiting the NSDL website. Visit the website here and submit the form.
Under application type select ‘Changes or Correction in existing PAN DATA’. Under category select, the appropriate option, like an individual taxpayer must select ‘INDIVIDUAL’. Fill in the applicant information correctly, enter the captcha code, and submit the form.
On a successful PAN verification, you will receive the confirmation and corrected PAN card from NSDL.
Yes, a PAN card is valid for a lifetime.
In the Union Budget 2017, the government made it mandatory to link PAN with Aadhar card for every individual. Hence every individual having a PAN must link it with Aadhar card.
Yes, it is mandatory for any taxpayer to quote a PAN card number while filing an income tax return. Moreover, from 1st January 2005, it has become mandatory to quote PAN in all challans for any payment made to the Income Tax Department
No, you cannot file an income tax return without quoting PAN