Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by an Assessing Officer of the Income Tax Department.
The fourth character of PAN represents the status of the PAN holder. "P" stands for Individual "C" stands for Company "H" stands for Hindu Undivided Family (HUF) "A" stands for Association of Persons (AOP) "B" stands for Body of Individuals (BOI) "G" stands for Government Agency "J" stands for Artificial Juridical Person "L" stands for Local Authority "E" stands for Limited Liability Partnership "F" stands for Firm "T" stands for Trust
Fifth character of PAN represents the first character of the PAN holder's last name/surname in case of an individual. In case of non-individual PAN holders fifth character represents the first character of PAN holder's name.
Who must have a PAN
Types of PAN application forms are there
There are three types of PAN application Forms are available:-
Transactions in which quoting of PAN is mandatory
• Sale or purchase of any immovable property valued at five lakh rupees or more
• Sale or purchase of a motor vehicle or vehicle (other than two wheeled vehicles).
• Making a time deposit with a banking company exceeding fifty thousand rupees or deposit in Post Office Savings Bank exceeding fifty thousand rupees.
• In an application for telephone connection including cellular telephone.
• Payment in cash for purchase of bank drafts or pay orders or banker's cheques for an amount aggregating to fifty thousand rupees or more during any one day or deposit in cash aggregating to fifty thousand rupees or more with a bank during any one day.
• A contract of a value exceeding one lakh rupees for sale or purchase of securities.
• Opening of a bank account. In case of a minor, PAN of Father, Mother or guardian, as the case may be, shall be mentioned
• Payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time.
• Payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time. Travel to foreign country does not include travel to Bangladesh, Bhutan, Maldives, Nepal, Pakistan or Sri Lanka or Travel to Saudi Arabia for Haj or travel to China on Pilgrimage to Kailash Mansarover.
• Making an application for issue of credit card or debit card
. • Payment of an amount of fifty thousand rupees or more to a Mutual Fund for purchase of its units.
• Payment of an amount of fifty thousand rupees or more to a company for acquiring shares issued by it.
• Payment of an amount of fifty thousand rupees or more to a company or an institution for acquiring debentures or bonds issued by it;
• Payment of an amount of fifty thousand rupees or more to the Reserve Bank of India for acquiring bonds issued by it.
• Payment of an amount aggregating fifty thousand rupees or more in a year as life insurance premium to an insurer.
• Payment to a dealer : [As amended by Finance Act, 2015] i. of an amount of five lakh rupees or more at any one time; or ii. against a bill for an amount of five lakh rupees or more for purchase of bullion or jewellery
A person not holding PAN and intending to enter into the specified transactions can furnish Form No. 60 (Form 61 in case of person having only agricultural income).
Process of application
A person wishing to obtain PAN can apply for PAN by submitting the PAN application form (Form 49A/49AA) along with the related documents and prescribed fees at the PAN application center of UTIITSL or NSDL. An online application can also be made from the website of UTIITSL or NSDL https://tin.tin.nsdl.com/pan/form49A.html
A resident person shall apply for PAN in form 49A and a non-resident person including a foreign company shall apply for allotment of PAN in form 49AA.
Individual applicants will have to affix two recent, coloured photograph (Stamp size 3.5 cms x 2.5. cms) on PAN application form. Prescribed document must be furnished as a proof of ‘Identity’ ‘Address’ and ‘Date of Birth’.
Documents required as proof of identity in case of individual applicants and HUF applicants.
Individual and HUF Applicants who are citizens of India and located within India at the time of application for PAN: Copy of any one of the following will serve as a proof of identity:-
School leaving certificate or Matriculation certificate or Degree of recognized educational institution or Depository account statement or Valid Credit card or Bank account statement or Water bill or Ration card or Property tax assessment order or Passport or Voter’s identity card or Driving license or Certificate of identity signed by a Member of Parliament or Member of Legislative Assembly or Municipal Councilor or a Gazetted Officer.
Passport or Other National ID attested by Indian Embassy/Consulate/High Commission/Apostille or Person of Indian Origin (PIO) card issued by Government of India.
Documents required as as proof of address for individual applicants and HUF applicants
A. Individual and HUF Applicants who are citizens of India and located within India at the time of application for PAN: Copy of any one of the following will serve as a proof of address:
Electricity bill*or Telephone bill*or Depository account statement*or Credit card statement*
Bank account statement*or Employer certificate*or Ration card or Passport or Voter’s identity card or Property tax assessment order or Driving license or Certificate of address signed by a Member of Parliament or Member of Legislative Assembly or Municipal Councilor or a Gazetted Officer.
*proof of address should not be more than six months old from the date of application
B. In case the PAN applicant is a minor, any of above documents of any of the parents or guardian of such minor shall serve as proof of address.
C. In case PAN application is made on behalf of a HUF, any of above documents in respect of Karta of the HUF will serve as proof of address.
D. Citizen of India located outside India at the time of application for PAN :-Copy of any one of the following will serve as a proof of address:
Passport or Bank account statement in country of residence or NRE bank account statement**
E. Foreign Citizen located in India at the time of application for PAN :- Copy of any one of the following will serve as a proof of address:
Passport or Bank account statement in India or Residential permit issued by the State Police Authorities or Registration certificate issued by the Foreigner’s Registration Officer
Person of Indian Origin (PIO) card issued by Government of India or NRE bank account statement**
F. In case ‘Office Address (of India)’ is mentioned in application made by foreign citizens , then it is mandatory to provide all five documents mentioned below as proof for office address.
Copy of Visa application to Indian authorities + Copy of Visa granted + Copy of appointment letter/contract from Indian Company + Certificate (in original) of address in India of applicant issued by authorized signatory of employer on employer’s letter head mentioning the PAN of the employer + copy of PAN card for the PAN mentioned in the employer’s certificate.
G. Foreign Citizen located outside India at the time of application for PAN :- Copy of any one of the following will serve as a proof of address:
Passport or Other National ID attested by Indian Embassy/Consulate/High Commission/Apostille or Bank account statement in country of residence, duly attested by Indian Embassy/High Commission / Consulate / Apostille in the country where applicant is located or Person of Indian Origin (PIO) card issued by Government of India or NRE bank account statement**
Note:-
** showing at least two customer induced transactions in last six months period and duly attested by Indian Embassy / Consular office / High commission or Apostille or by the manager of the bank in which the account is held. The applicant may be a joint holder.
Documents required as proof of identity and proof of address for applicants other than individual and HUF
1. Having office of their own in India:
Type of Applicant |
Documents for proof of identity and address |
Company |
Copy of certificate of registration issued by Registrar of Companies. |
Firms |
Copy of certificate of registration issued by Registrar of firms or Copy of Partnership Deed. |
AOP (Trusts) |
Copy of trust deed or Copy of certificate of registration number issued by Charity Commissioner. |
AOP/BOI/Local Authority/Artificial Juridical Person |
Copy of agreement or Copy of certificate of registration number issued by Charity Commissioner /Registrar of Co-operative Society / any other Competent Authority or any other Document originating from any Central / State Government Department establishing identity and address of such person. |
2. Having no office of their own in India:
Type of Applicant |
Documents for proof of identity and address |
Company/Firms/AOP (Trusts)/AOP/ BOI/Local Authority/Artificial Juridical Person |
Copy of registration certificate of the respective country duly attested by Indian Embassy in the country where applicant is located or Copy of certificate of registration with the competent authority in India or Copy of approval issued by the competent authority in India or Copy of the accompanying documents alongwith the approval issued by competent authority in India or |
Holding of more than one PAN not allowed A person cannot hold more than one PAN. A penalty of Rs. 10,000/- is liable to be imposed under section 272B of the Income-tax Act, 1961 for having more than one PAN. If a person has been allotted more than one PAN then he should immediately surrender the additional PAN card(s) to the Assessing Officer giving details of all the PANs allotted.
Advantages of holding a PAN card are as follows:-
a.The PAN card carries your photograph, name and address. Hence it serves as a nationally accepted proof of identity.
b.Without a PAN card, you will be taxed at the highest rate possible. If you pay TDS (tax deducted at source), that cannot be counted without a PAN card and you may end up paying tax twice.
C.The PAN number is unique to every PAN card holder. Your name and address may change; your card may get lost or stolen; but the PAN will remain unchanged. So, the possibility of misuse is rare.
d. As an ID proof, the PAN card is sure, dependable, nationally recognized and unchanging.
e. With a valid PAN card, you can easily enter into different financial transactions. You can obtain landline and cell phone connection; you can open demat account; you can buy and sell property and share and much more.
f. If you are NRI, you can easily buy property or engage in business in India with the help of your PAN card without filing tax returns.
g. A minor account can be opened and operated easily with the PAN card of the guardian.
Not only does the PAN have all these great advantages, but also it is necessary to carry on most of the normal transactions. The process has been highly simplified. So, you should make no delay in getting your PAN card.
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