Understanding PAN Card – Uses, Types, and Eligibility

All taxpayers in India, are mandatorily required to furnish their Permanent Account Number (PAN). So, it is compulsory to obtain a PAN (Permanent Account Number) card because it should be necessarily quoted in all communications with the Income Tax Department.

What is a PAN (Permanent Account Number) card?

The income tax department of India issues a laminated card which states the unique Permanent Account Number (PAN) and other identity details of any person who has applied to obtain a PAN (Permanent Account Number) Card.

A Permanent Account Number r is a unique, 10 digit alphanumeric code that is used to club all transactions of an individual with the IT department. These transactions involve tax payments, TDS/TCS credits, etc.

Structure of a PAN Number

Character(s) of the PAN Number	What does it represent?
First Three Characters	Alphabetical series that run from AAA to ZZZ
Fourth Character	It represents the status of a PAN holder. For example, “P” represents an Individual, “F” represents a firm.
Fifth Character	Initial letter of the PAN holder’s last name
Next four characters	Numerical series running from 0001 to 9999
Last character	An alphabetic check digit

Advantages of a Permanent Account Number card

• Necessary for all communications and payments to and from the Income Tax Department of India

PAN acts as an identifier for all individual or firm level tax related matters. To claim a tax refund, pay tax, submit tax deducted at source or tax collected at source, etc. you need to have a unique Permanent Account Number. Using the PAN number, a company or the income tax department can identify who has applied for a loan or whom to contact for a loan related issue, as it helps them to identify the concerned person for the same.

• Valid Identity Proof

A PAN (Permanent Account Number) Card qualifies as a valid identity proof all across the country. It contains all important details such as name, date of birth, photograph, signature, etc. It is also one of the KYC documents accepted by financial institutions. Like any other identity proof like Aadhar, Passport, driving license, etc. even PAN can be used to prove one’s identity. Also, for most of the financial transactions or registering with a financial institution be it in the capacity of a customer, or a beneficiary, or a payee, PAN being an essential document which needs to be submitted. 

 

• Enables verification of payments

A Permanent Account Number card card ensures that all of your payments will be clubbed under your Permanent Account Number so, it becomes easier to verify your payments. Let’s suppose you have had x number of loans throughout your credit history, the repayment data data can be verified using the Permanent Account Number. Also, it can be used as an identifier to understand both beneficiary and remitter details.

• Permanent Account Number card is mandatory for certain financial transactions

PAN (Permanent Account Number) Card is necessary for certain financial transactions, for example, the sale and purchase of vehicles other than two-wheelers, applying for a credit or debit card, opening a Demat account with SEBI, etc. Reasons are multiple, first and foremost reason being to serve as a KYC document, or a valid identification proof. Second reason being to record any financial transactions or credit related information which may be relevant to the government for either tax related purpose or to the financial institutions to keep a track of the credit transactions which determines your credit score.

 

• Registration of Businesses

An entity such as a company, a firm, a HUF, etc. cannot register their businesses without a PAN (Permanent Account Number) Card. PAN is necessary for businesses as it is used to file income tax returns. A business’ main purpose is to earn income, and naturally any income would be taxed. To identify the earning of a business, the government would need an identifier to understand the correct earning to essentially tax the firm. Hence, getting a PAN (Permanent Account Number) Card for a business is essential.

 

Eligibility to apply for a PAN (Permanent Account Number) Card

Permanent Account Number cards can be applied by individuals, HUFs, companies, institutions, NRIs and anyone who is liable to pay taxes in India. PAN (Permanent Account Number) Card eligibility is pretty basic, a business of any size and form can apply for a PAN, in case if the applicant is an individual, then the applicant should 18 years of age to get a normal PAN, however, even minors can apply for a PAN with their guardian being the co-signer.

 

Types of Permanent Account Number cards

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

• PAN (Permanent Account Number) Card for Individuals – Can be applied through form 49A by any resident of India including students and minors.
• PAN (Permanent Account Number) Card for Non-Resident Individuals – They too have to submit form 49A and can be eligible to apply for the same if they pay taxes in India.
• PAN (Permanent Account Number) Card for foreign entities paying tax in India – Any company registered outside India but pays taxes in India can avail of a PAN (Permanent Account Number) Card by filling out form 49AA.
• PAN (Permanent Account Number) Card for OCI and NRE – Overseas Citizens of India and Non-Resident Entities can also apply for a PAN Card through form 49AA
• PAN Card for Indian Companies – Firms and companies can also apply for a PAN (Permanent Account Number) Card for tax-related transactions.

Others who can obtain a PAN (Permanent Account Number) Card?

• An individual
• Association of Persons (AOP)
• Body of Individuals (BOI)
• Trust
• A company
• A firm
• Hindu undivided family (HUF)
• Government
• Local Body
• Artificial Judicial Persons

How to Apply for a Permanent Account Number card?

Application for a PAN (Permanent Account Number) Card can be submitted either online or offline.

Offline PAN Application:

Step 1: An applicant needs to download a copy of a PAN (Permanent Account Number) Card from the NSDL or UTIITSL website – https://incometaxindia.gov.in/forms/income-tax%20rules/103120000000007917.pdf . The same can also be collected from UTIITSL agents & Instructions to fill out the form – https://tin.tin.nsdl.com/pan/Instructions49A.html

Step 2: The applicant needs to fill out this form and submit the relevant documents to the NSDL office along with a processing fee.

Step 3: The PAN (Permanent Account Number) Card will be delivered to the address mentioned in the application within 15 working days.

Online PAN Application:

Step 1: Visit the NSDl or UTIITSL website for PAN application online – https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html

Step 2: Click on “New PAN”

Step 3: Individuals need to fill in PAN form 49A.

Step 4: The applicant needs to deposit a processing fee.

Step 5: The final page will be generated after the payment, and this will consist of a 15-digit acknowledgment number.

Step 6: The acknowledgment form shall be sent to NSDL online along with all relevant documents.

Step 7: Upon verification of the application and documents, the physical card would be dispatched within 15 working days.

Required PAN Card Documents

An individual applicant needs to submit identity proof (such as an Aadhar Card, Voter Id Card, Arm’s Card, Pension card with photograph, Central Government’s Health Scheme Card, etc.), address proof (such as Aadhar Card, electricity bills, bank statement, voter id card, water bill, postpaid mobile phone bill, driving license, passport, etc.) date of birth proof (such as matriculation certificate, driving license, passport, etc.)

(PAN) Permanent Account Number card forms

There are two types of PAN (Permanent Account Number) Card forms i.e. Form 49A and Form 49AA.

Form 49A: Form 49A is supposed to be filled by Indian nationals. Minors and students can also apply for a PAN (Permanent Account Number) Card by filling out form 49A.

Form 49AA: Form 49AA is supposed to be filled by foreign nationals who wish to obtain a PAN (Permanent Account Number) Card in India. Both forms contain details like the Assessing Officer (AO) code, name, address, e-mail id, phone number, etc. of the applicant.

Permanent Account Number (PAN) Format:

The PAN number is a 10 digit alphanumeric identification number. 

The first 5 characters are alphabets followed by 4 characters being numbers and the last character being an alphabet. The first three characters are the currently running series, the fourth character represents the type of PAN. i.e. “P” stands for personal, “F” stands for Firm, “C” stands for Company, “H” stands for HUF, “A” stands for AOP, “T” stands for TRUST etc. The fifth character represents the first character of the PAN holder surname/last name. The next four characters are numbers running from 0001 to 9999, and the last character is the alphabetic check digit.

 

How to update or edit PAN card details?

The applicant can visit the official website of NSDL and select the update PAN section. Then he must select “correction” and update the details to be changed on on the PAN (Permanent Account Number) Card.

A copy of POI or POA documents is required to do the needful

The DO’s and DON’T’s for updating PAN details

• The form must be filled only in capital letters : This is to ensure readability, PAN letter allows the verifier to read the form easily and eliminates any mistakes in reading, reason being that PAN is sensitive document, and any readability issues in the application may result in wrong information being permanently captured in the user’s PAN details.
• All the fields must be properly filled : This is one of the most important tips. The application form only asks for necessary information, and the applicant shall ensure that they are providing all the information asked in the form, and more importantly correct and truthful information is being provided.
• Updating the correct mobile number is mandatory : It is essential to provide correct and a valid mobile number in the PAN application form. This is to ensure that correct and updated contact information is being captured, as it is useful for triggering OTPs, and to verify the user.
• Preferably the form should be filed in English but an option to fill in the local language is also provided : The applicant can choose to fill the form in the regional language, however they should ensure that the information provided should be legible, accurate, and truthful. These 3 qualities would ensure hassle free and quick PAN issuance.
• Important to add salutations to the name : Salutations help identify the correct way to address a person, hence it is essential to provide the correct salutations.
• The complete address should be updated : Address details should be updated as it is one of the most important identifiers for identity proof. It is essential to provide accurate and verifiable details.
• Signatures and thumbprints should be thoroughly checked and be done properly : Signature or thumbprint are a form of self declaration which indicates that the information provided in the document is vetted by the applicant and confirms that the information is accurate and truthful.
• If there is any kind of misleading information, incorrect information or inconsistency in the form, it will result in a cancellation : Providing accurate and verifiable information is always recommended while making an application for something. However, it becomes essential while applying for a necessary document like a Permanent Account Number card which serves as an identity proof and can have tax and credit implications, and manipulation may result in identity or financial fraud.

What if the PAN (Permanent Account Number) Card is lost?

In case the PAN (Permanent Account Number) Card is lost the applicant can file for a duplicate PAN (Permanent Account Number) Card online by requesting for the same through the official website of SDL and filling in the form 49A for citizens and 49AA for foreigners. A payment needs to be made online after which the Pan card will be issued within 45 days. The PAN (Permanent Account Number) Card is valid for a lifetime.

Why does an individual need a Permanent Account Number Card:

PAN is a unique identification number that enables tax-paying in India and can act as the following

• Mandatory for Filing Taxes : It is issued by the income tax department, an individua;/company’s earnings are recorded, and PAN is mandatory for assessment
• Proof of Identity : Since it is issued by a government authority, and has the cardholders photo, name and signature, it is accepted as an identity proof
• Eligibility to open and operate Bank Accounts : Since financial transactions are done in a bank account, it is mandatory to hold a valid PAN to operate a bank account
• Financial transactions : PAN is required to do financial transactions to correctly record the funds flow which and to avoid money laundering
• Proof of Address : PAN is also accepted as a proof of address in many cases
• Registration of Business : To indicate that the business is registered with the income tax authority to pay liable taxes, it is necessary to hold a PAN
• Phone Connection : PAN can be used to get a phone connection since it is a form of valid identification proof
• Gas Connection : Similar to phone connection, PAN can also be used to get a gas connection due to its validity as an identification proof
• Mutual Funds : Since financial transactions and profit and loss are booked in mutual funds transactions, it is essential to hold a valid PAN

Uses of PAN (Permanent Account Number) Card in Financial Transactions:

• While paying taxes
• When registering a new business
• Financial transactions like:
• Sale or purchase of immovable property above Rs.5 lakh
• Payments made to fulfill travel requirements that is above Rs.25,000
• Sale or purchase of a vehicle besides a two-wheeler
• Payments made towards hotels and restaurants above Rs.25,000
• Payments towards bank deposits of more than Rs.50,000
• Purchase of shares worth Rs.50,000 or more
• Purchase of bonds of more than Rs.50,000
• Purchase of insurance policies of more than Rs.50,000
• Purchase of mutual funds
• Purchase of jewelry of more than Rs.5 lakhs
• To send money out of India.
• Any transfer of funds from NRO or NRE account

What is the consequence if the citizen or tax-payer does not have a Pan Card

• Flat 30% tax on your earnings and wealth, Not having a Permanent Account Number card will result in the government not being able to track any tax deductible investments, resulting in a flat 30% tax rate applicable on the income. This makes it really important for an individual or a business to have a PAN (Permanent Account Number) Card to avoid paying extra taxes.
• The applicant won’t be able to purchase a vehicle, open a bank account, buy an immovable property that is above Rs. 10 lakhs, etc. The reason being that a Permanent Account Number card is necessary to perform such actions. Be it investing, opening a bank account, or buying and selling of an asset, there is a financial transaction or a possibility of profit or loss involved. Hence if a person above the age of 18 is planning to perform such transactions, it is essential to hold a valid Permanent Account Number card.
• Businesses won’t be able to conduct major functions like financial activities and procurement :  As businesses’  motive is to earn profit through their operations, absence of PAN (Permanent Account Number) Card will mean them not being able to participate in financial transactions in the structured market. Hence, a PAN is one of the main and most important documents for businesses.

How is PAN (Permanent Account Number) Card card allotted?

• PAN verifies and analyze the form which is filled for the applicant of the Permanent Account Number card.
• assess the application details. The details are further cross-verified by the Assessing Officers against the details of existing Permanent Account Number card holders in the database.
• If there is no record of a previous PAN given to the applicant, then the request is processed.
• A PAN is allotted to a person as per his classification as a taxpayer.

PAN for e-KYC has huge benefits for the applicant and government as well

• The e-KYC process is paperless : Paperless processes have many benefits like ease of application, application tracking, etc.
• PAN (Permanent Account Number) Cardholders can share information within minutes, thus eliminating long waiting periods, this makes the whole process highly efficient and time saving.
• Information shared between the user and service provider is through secured channels.
• These documents cannot be forged Unlike physical application forms that are susceptible to forgery, the online process is secure, and highly reliable.
• Information shared by e-KYC contains authenticated data
• It is legal for the stakeholders involved in the transaction.
• The entire system is paperless making it a cost-effective and time-saving process.

Read More:
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e-PAN Card – How to Download & Reprint Duplicate e-PAN Card Online through NSDL/UTIITSL

PAN Card Correction & Update – How to Change Name, Address in PAN Card

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PAN Card FAQs:

1. Is it possible to edit details in a PAN (Permanent Account Number) Card?

Yes, one can make changes in a PAN (Permanent Account Number) Card.. In order to do that, you are required to fill a Permanent Account Number card correction form.

2. Can a minor apply for a PAN card?

Yes, minors are eligible to apply for a PAN (Permanent Account Number) card. A representative assessee can represent a minor for the same.

3. Are foreign nationals required to obtain a PAN in India?

Any person or a group of persons undertaking business in India is required to obtain a Permanent Account Number (PAN). This is mandatory because every business has to file tax returns.

4. What is the fee for Permanent Account Number card application?

While applying for a PAN (Permanent Account Number) Card, one needs to submit a processing fee i.e. Rs. 93 (excluding GST) for delivery of the card to Indian address and, Rs. 864 (excluding GST) for delivery to a foreign address. (Such prices are subject to change as per discretion of the Income Tax Department).

5. Do I need to furnish an income statement for obtaining PAN?

No, income statements are not required for obtaining a PAN. You need to submit an identity proof, address proof and date of birth proof.

6. What is the validity of a PAN card?

A Permanent Account Number card once obtained, has a life-long validity. PAN (Permanent Account Number) Card is not affected by changes in the database of an individual. However, such changes must be notified to the Income Tax department in the form ‘Request for New PAN/Correction in PAN’

7. Can a person obtain more than one PAN?

No, obtaining more than one PAN attracts a penalty of Rs. 10,000 under the Income Tax Act. If any person has been allotted more than one PAN, the additional PAN (Permanent Account Number) Cards must be surrendered immediately.

8. Is it mandatory for a female to enter her father’s name on the Permanent Account Number card and can it be replaced by her husband’s name later?

The only name a female, whether married, unmarried, divorcee or widow, is her father’s and not her husband’s in any case.

9. What are the different ways, through which PAN card information can be obtained?

PAN (Permanent Account Number) Card details for any person can be obtained by entering the following information: • Permanent Account Number card Number • Name • Date of Birth • Full Address • Mobile Number

10. Is it mandatory to link PAN with Aadhar?

Yes, it helps in identifying one person with one PAN (Permanent Account Number) Card and prohibits the issuance of multiple PAN (Permanent Account Number) Cards to the same person. This is further helpful in tax filling if the citizen of India has an Aadhar card assigned to him.

11. How many photos do I need for PAN application?

For a PAN application, you typically require two recent passport-size photos. These should be clear, colored, and against a light background. Ensure they meet the specified dimensions (3.5 cm x 2.5 cm). These photos serve identification purposes and are integral to your PAN application, validating your identity in official documentation.

12. How do I check the status of my PAN application?

To track the status of your Permanent Account Number card application, visit the official website of the PAN Card issuing authority. Navigate to the ‘Track PAN (Permanent Account Number) Card Status’ section and enter the application’s acknowledgement number. Alternatively, you can call the PAN (Permanent Account Number) Card helpline and provide the necessary details for an update on your application’s progress.

13. How long does it take to get a Permanent Account Number card?

The duration for obtaining a PAN (Permanent Account Number) Card varies. After submitting a PAN application, processing times usually range from 15 to 20 business days. However, factors like accurate documentation, verification procedures, and workload at the issuing authority can affect this timeline. To expedite the process, ensure all necessary documents are correctly furnished and adhere to the guidelines for a smoother application journey.

PAN Card News

PAN Card is mandatory for certain specific withdrawals and deposits: A New Indian Income Tax rule

PAN Card and Aadhaar cards have been made mandatory for particular withdrawals and deposits. Earlier the bank should ensure that the exceeded transactions should have PAN but now the bank should keep the PAN number in the records and should inform the Income tax department of any large amount transactions.

• There was a rule that a PAN number is mandatory for above 50,000 cash withdrawals in a single day. 
• Now every person should reveal their PAN number if they exceed above 2 million cash withdrawals and deposits in a financial year from one or more bank accounts. 
• The person should pay a penalty of 100 percent of the money received if they have done transactions above the limits.
• This rule has been applicable since May 26 and it has been introduced to reduce financial frauds and money crimes.

So, every person should have a PAN account number and if not should apply for it seven days prior to the transactions.

News Updated Date: 01st September 2022Permanent Account Number. Using the PAN number, a company or the income tax department can identify who has applied for a loan or whom to contact for a loan related issue, as it helps them to identify the concerned person for the same.Permanent Account Number (PAN)