What is a PAN Card? : PAN stands for Permanent account number which is allotted to every eligible taxpayer of the country. It is availed by the income tax department that works under the governance of the Central Board of Direct Taxes. It basically is a 10 digit alphanumeric number which is unique in its coding. This laminated card comprises of certain distinguishable characteristic hence is also used as an identity proof for various purposes, comprising of financial and personal. Since the PAN card is also issued to all the foreign investors and business persons forming any sort of professional link with the country, it cannot be take as a verification of the citizenship of India. Moreover, it is one of the ways to keep a sharp eye on all types of financial transactions that might lead to the shirking of the payable taxes. Also, it includes the employer’s salary, TDS credits, TCS credits, returns of the income, wealth, and gifts etc. that might lead to the shirking of the payable taxes. Apart from the mentioned uses, the PAN card is also essential while selling and purchasing of the goods and services above a mentioned limit. The Permanent account number remains unaltered and uninfluenced by any type of change in the address of the holder. Hence a PAN card made once can be used for a lifetime.
What is PAN Card
Structure of a PAN
A Pan card is a laminated rectangular card with all the necessary details mentioned on it. This includes the date of birth, contact details, address details and income details. The unique PAN number printed on it follows a general pattern which looks like AAAPL1234C. A Possible example of a valid PAN card number could be APZPK7160K.
- The first three letters are a part of the unique alphabet series that lies between AAA and ZZZ. In the above-mentioned example, the letters APZ denotes that unique sequence.
- The fourth letter is the representation of the holder’s identity and status. There is a specific letter designated for a particular status. In the PAN coding system, A is for the Association of Persons, F is for the firm, C is for the company, T is for trust, P is for individual and L is for the local authority. In the above-mentioned example, the letter “P” is indicating that the Cardholder is an Individual and not a company or firm.
- The fifth character in the code is the first letter of either the individual or the company on whose name the PAN card is registered. The example above states that the character “k” is the first letter of the individual who owns the PAN card with the following number.
- The next four digits that can be spotted at the sixth-ninth place are a part of the sequential series that is running from 0001 to 9999. 7160 is that unique 4 digits serial number as can be seen in the above-mentioned example.
- The alphabet check digit forms the last character of the PAN card number. For example “k” in the talked about Pan card.
Read More – PAN Card Application Form
Who must have a PAN Card?
As already mentioned, the PAN card number is essential to legalize all the transactions and thereby have a full proof of the financial activities that are being carried out. Owing to these reasons, it becomes mandatory for the below mentions to apply and hold a PAN card.
- All the people who fall within the bracket of those liable to pay the required tax to the government.
- All the people who are involved in any type of commercial activity which in return in earning them a turnover of 5 lakhs or more are expected to bring their financial activities in the notice of the government.
- All the registered trust and companies need to have a PAN card.
- All the importers and exporters who carry out business and exchange of any sort and are liable to pay the tax under the income tax act.
How to get a PAN card?
There are different methods to apply for a PAN card. One can either fill up an online form on the NSDL (income tax department of national securities depository limited) website and carry onward the formalities or consult one of the district levels PAN offices that can guide you through the procedure of application and get a PAN card. You need to fill up the “Form 49A” in order to issue a new PAN card. Post to submitting the proof of identity and other necessary documents, the payment can be made through the means of cheque, cash or demand draft. If you are opting for an online application system, net banking or debit/credit cards would do for you.
Follow the steps In order to apply through the online mode:
- Fill up the 49A for Indian citizenship form.
- Fill up the details accurately, mentioning all the information about your permanent address, date of birth, contact details, income details (including the source of income)
- Submit the form and follow up with the procedure to make the payment.
- Take out the print out of the page and mention the 15 digit acknowledgment. Do not forget to do your signatures.
- Paste a passport size photograph, attest a photocopy of your identity proof and address proof along with the demand draft.
- Post the application to the address of the NSDL’s office.
Follow the steps to apply offline:
- Either download an application form from the website or collect it from the agent of the UTIISL.
- Fill up the form as desired and attach all the documents as demanded. The documents will be same as attached with the online form.
- Submit the application form at the NSDL’s office along with the fee. The rest of the process can be tracked through your id by sitting at your home. Once the PAN card is ready, you can either collect it from the registered PAN center or it will be delivered to the mentioned address within the next 15 working days.
Follow the steps to obtain a new card in case you have lost your PAN card.
- The official website of the NSDL offers an option of “PAN change request” to get a new card in case you have lost it. Click on the option and fill in the necessary details accordingly.
- There are options available to change certain details or the PAN card number. If you do not wish to make any such changes, do not click on any option listed to the left of the margin.
- Attach a photocopy of any identity proof. It may be your aadhar card, passport, ration card, driving license etc along with a copy of the lost/damaged PAN card.
- Submit the form thereafter.
- Make the payment through net banking or credit/debit cards. This will be followed by a page displaying the tracking details. You can carry on with the tracking process until the time you receive the PAN card in your hand.
Different types of PAN cards
- PAN cards to be issued for the individuals- this card is used by the I-T department to take into account the entire unpaid taxable amount that is due on the holders. It has a photograph and address details of the individual.
- PAN card to be issued for the companies- the card is similar to the one issued to the individuals but differ in certain aspect. A PAN card for the company does not have any photograph since it is not linked to a particular person rather a company. Also, in place of the date of birth, the company’s registration date is marked.
- PAN card for the foreigners- all the people and companies from outside India, who wish to carry on any sort of business, need to apply for a PAN card through the application “49AA”. It is very similar to the PAN card issued to the Indian companies and trusts. One needs to attach a copy of the overseas citizen of India (OCI) card that is issued by the government of India. Also, a citizenship/national identification number of the foreigner from the embassy or the high commission is required.
What is the importance of the PAN card?
Besides the fact that PAN card act as a permanent and life time proof of your identity and is demanded innumerable business and personal transactions, there are hundreds of other necessities that it fulfills. Below are few of the mentioned scenarios where PAN card becomes extremely important.
- It is the compulsory document if you are willing to file your income tax returns or to receive a tax refund.
- Registration of a new company or appointment of a new employee requires PAN card proof.
- Income tax payment also requires detailed information taken from your PAN card.
- Sales and purchase of automobiles accept the two wheelers.
- Any sort of contract that involves a transaction for buying or selling of securities of worth 1 lakh or more.
- Transferring the NRE funds to the NRO demands PAN details.
- Insurance policy of worth 50,000 and more requires the policyholder to give a detailed account of the PAN card.
- Payment made above 5 lakhs in the purchase of jewelry or other ornaments.
- Mutual fund schemes and bonds that range above 5 lakh also demands PAN card details.
- During the payment of the “direct taxes”, it is essential to quote the PAN card.
- All the payments above 25 thousand that are in regard to travel to some foreign country demand the Pan card details.
- While depositing more than 50 thousand in a single bank account within a day.
- For the opening of a new bank account, PAN card is used as an identity proof.
- Selling and purchasing land, house or other immovable property demands you to show the PAN proof. When it comes to the general uses of the PAN card, there is a long list of the same. Apart from the financial and business purposes, the Pan card is used for other reasons like:
- Verification of the tax payment so as to ensure that you do not have to pay it multiple times due to any mistake in tracking the procedure.
- Owing to its unique characteristics and features, it can never be used for frauds like tax evasions.
- It can be used as a proof to get the LPG, electricity and water connection.
- This unique number code is used in tracking the financial information like debt liabilities and investments.
What would happen in the absence of a PAN card?
Since it has become a mandatory document to carry on a lot many financial transactions, it would get impossible for you to buy a motor four wheeler or a house that costs 10 lakhs and above. Also, you won’t be able to open a bank account and enjoy numerous services. What makes the situation worse is the implication of 30% flat tax on our income. As per the policy issued by the income tax department of India, the individual is liable to pay 30% tax on their earnings. When it comes to the businesses, a flat 30% TDS will be demanded as well. Concerns regarding the PAN card Looking at the difference in the number of issued PAN cards and the genuine tax payers of the country, certain concerns arises. Despite knowing the fact that it is illegal to obtain the PAN card fraudulently, certain companies and individuals have done so. The pervasive plastic card printers have made it easy beyond the expectations for the cheaters to avail the PAN cards to the illegal immigrants in the country.
All the other websites apart from NSDL e-Governance & UTIITSL, who promises to issue a valid Pan card, should not be trusted. Also, the fraud agents who promise to provide a faster delivery of the PAN card at lower rates should not be consulted in order to prevent you from further complications of the future.