PAN Card: PAN (Permanent Account Number) in India

PAN (Permanent Account Number) is 10-digit unique identification alphanumeric number. It can be obtained by Indian citizens and foreigners, usually those who pay tax, run a business or professional practice in India, or undertake financial transactions in the country. The individuals and entities who are allotted a PAN, receive a PAN Card. The Indian government launched the concept of PAN Card in 1972 under Section 139A of the Income Tax Act, 1961. This document acts as an important proof of identity and date of birth. It was made mandatory in 1976 for all tax paying individuals.

The system of PAN identification assigns a unique PAN number to every Indian taxpaying person or entity. All the tax-related details of the cardholder are stored in the PAN system. It is the Income Tax Department that allots PAN to entities. A PAN Card is a physical document. It contains the Permanent Account Number, cardholder’s name, photograph, date of birth, and other details.

In this post, we will discuss about types of PAN Cards and eligibility criteria, application process, things to consider for application, structure of PAN Card, meaning of alphabets in PAN, the document’s uses and benefits, and FAQs.

Types of PAN Cards

A PAN Card for an individual consists of his/her name, photograph, date of birth, father’s name, authenticity hologram, signature, date of issue of the document, QR Code, and the Permanent Account Number. On the other hand, PAN of companies consists of company name, PAN Number, date of company’s registration, hologram, date of issue of the document, and QR Code. A PAN Card of company does not have any signature or photograph.

Every taxpaying entity needs to have a PAN Card. Based on the entity; the required type of PAN Card will differ:

• PAN Card for Indian citizens
• PAN Card for foreign citizens
• PAN Card for Indian companies
• PAN Card for foreign companies

PAN Card Eligibility

The following taxpaying entities must have a Permanent Account Number as per the Section 139A of the Income Tax Act:

• Any individual who is liable to pay tax or pays tax to the IT-Department. This will be on the basis of the income tax slabs.
• All taxpaying entities such as individuals, companies, minors, HUFs, trusts, body of individuals, and others must apply for a PAN Card.
• Any type of charitable organization, association, and trust.
• Any person who is carrying out a professional practice or business that earns an annual turnover above Rs. 5 lakhs for an assessment year.
• Exporters and importers responsible to pay any form of duty charges or taxes according to the Income Tax Act of India or any prevalent law.

PAN Card Application Process

You can apply for PAN Card online or offline. For online application, you have to login to either the NSDL or UTIITSL portal. You can even apply for a fresh PAN Card or update/change/correct information in this document. You may even request for a duplicate copy of this document, or simply download and reprint it. For offline application, you can apply at any of the PAN agencies of district-level.

• Fill the Form 49A if you want to apply for a new PAN, and are an Indian citizen, NGO, local body, partnership firm, company, NRI, Trust, etc.
• Fill the Form 49AA if you are a foreigner or foreign entity.
• Submit the filled up and duly signed form with required documents for PAN Card (proof of identity, proof of address, and proof of date of birth) to the Income Tax PAN Services Unit.
• The entire process of approving, printing, and dispatching the Card takes at least up to 14 days.
• After you apply for a duplicate or new PAN Card, or request for changes/corrections, use the provided acknowledgement number to track the PAN Card status online.

Things to Consider for PAN Card Application

Here are the do’s and don’ts of PAN application:

• Fill up the PAN Card form with accurate and necessary details. This information must match with the proof of identity, address, and date of birth that you are submitting for application.
• Use capital letters to fill the application form. Provide complete address and contact details in the form.
• Request for a duplicate PAN Card if the original is damaged/stolen/lost. Do not request for a new PAN Card in this case.
• If you are unable sign the document, then you must provide a thumb impression. This must be attested by a Magistrate/Notary to avoid disqualification.
• Do not use initials in the last name and first name columns.
• Do not overwrite or make corrections in the form.

PAN Card Structure

The details in a PAN Card are mentioned below as per the KYC (Know Your Customer) guidelines:

• Cardholder’s name, father’s name, date of birth, signature
• Photograph of the cardholder
• 10-character alphanumeric Permanent Account Number
• The document also has a logo and hologram of Indian Government
• It has a tag of Income Tax Department

Meaning of Alphabets in a PAN Number:

A PAN number is a combination of 10 characters. Here, the first 3 characters are English alphabets from AAA to ZZZ. The fourth character may be an alphabet as well. It specifies the taxpayer category as 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

The fifth character is an alphabet. It depicts the first character of the cardholder’s surname. The next four characters (sixth to ninth) are random numbers. The last character is then an alphabet.

PAN Card Benefits and Uses

A PAN Card is an important proof of identity as it is government recognized. It is also necessary in case of a large monetary transaction. This document is required when you pay income tax, get IT refund, receive intimation from the Income Tax Department. This document keeps a check on the financial transactions. It is useful to track the outflow and inflow of money.

But in the 2019 Union Budget of India, the government had proposed that those with no PAN Card, can utilize their Aadhaar Number to file Income Tax Returns. The Aadhaar Number can also be used for any other requirement for which earlier PAN was compulsory. Thus, if you have not linked your Aadhaar with PAN yet, or do not have a PAN Card but possess an Aadhaar, then you do not have to apply for a new PAN or link Aadhaar and PAN.

When is PAN required for general uses:

• A PAN Card can be used as a valid identity proof in India because it contains details such as name, photograph, and age.
• You can utilize this document even to get utility connections for telephone, internet, LPG, electricity, etc.
• It is useful to track tax payment and IT filing verification. The document is unique with unique combination of PAN number. Thus, it cannot be misused for tax evasion and other dubious purposes.

When is PAN Necessary in Financial Transactions:

• This document is required when you pay income tax or direct tax. It is also necessary when registering a business.
• This Card is also required for payments above Rs. 25,000 towards restaurants and hotels.
• Sale or purchase of vehicle, excluding a two-wheeler.
• Purchase of shares/insurance policy/bonds/ of Rs. 50,000 or more.
• Purchase or sale of immovable properties of Rs. 5 lakh or more.
• Payments above Rs. 50,000 to bank deposits.
• Purchase of mutual fund schemes.
• To transfer funds from NRE to NRO account and to remit money out of India.
• Payments over Rs. 5 lakhs towards bullion or jewellery.
• Payments for travel needs to other countries and the amount exceeds Rs. 25,000.

Frequently Asked Questions about PAN Card

Here are the PAN Card FAQs: