PAN – Permanent Account Number

Permanent Account Number abbreviated as PAN is a unique 10-digit alphanumeric number issued by the Income Tax Department to Indian taxpayers.

The department records all tax-related transactions and information of an individual against his unique permanent account number. This allows the taxman to link all tax-related activities with the department.

PAN primarily acts as a database for all individual transactions, such as the tax collected at source (TCS)/tax deducted at source (TDS) credits, income tax payments, return on gift/investments/wealth, etc. Simply put, the PAN enables the tax department to identify an individual’s tax-related transaction.

What is a PAN?

Permanent Account Number (PAN) is a unique identification number provided by the Income Tax Department. The Income Tax Act mentions that individuals falling under the following criteria are required to obtain PAN:

If a particular person’s income crosses the basic exemption limit for a financial year.
If the overall earnings or business exceeds the limit of five lakhs in the financial year.
If the person is required to get import and export code or GST registration.
If the person receives any amount after deducting withholding tax from the total earnings payable to another person.
If any financial transactions which are undertaken require submission of PAN card mandatorily.

PAN in India can be obtained voluntarily by any person, irrespective of citizenship, residency or age. Hence, foreigners, NRIs and minors are also allowed to obtain PAN.

PAN Card

The tax department issues an individual’s PAN on a physical card referred to as the PAN card. The PAN card includes information, such as the PAN number, photograph, name, and date of birth of the holder.

PAN has a typical format of ABCTY1234D. The first three characters, i.e. ‘ABC’ in the above number is an alphabetic series ranging between AAA and ZZZ. The 4th character, i.e. ‘T’, represents the PAN holder’s status. The alphabet ‘T’ represents Trust, ‘F’ for Firm, ‘H’ for HUF, ‘P’ for Individual, ‘C’ for Company etc. The 5th character, i.e. ‘Y’, represents the first alphabet the PAN holder’s last name. The next four characters are sequential digits ranging between 0001 and 9999. The 10th character, i.e. ‘D’, is an alphabetic check digit that runs from A to Z.

Transactions Requiring PAN

PAN is required for filing an income tax return in India. In addition, according to the rules of Income Tax under 114B, 1962 submission of PAN is necessary for an individual if the taxpayer gets involved in the following financial activities:

Involved in selling or purchasing activities of motor vehicles excluding two-wheelers, where the PAN document is mandatory during the registration process.
Opening bank account including with cooperative banks.
To apply for a credit card or debit card or loan.
An opening of DEMAT account.
To pay hotel or restaurant bill of more than Rs.50,000 in a single transaction.
To purchase foreign currency of more than Rs.50,000 or travel outside the country.
To purchase mutual funds worth Rs.50,000 or above.
Buying a company’s debentures or bond worth Rs.50,000 or more.
Buying bonds worth Rs.50,000 or more from Reserve Bank of India (RBI).
Depositing cash of Rs.50,000 or more in a bank or post office in a single day.
Buying bank’s draft, any cheque which is worth Rs.50,000 or more through cash payment in a single day.
One time deposit which exceeds Rs.50,000 or more in a single day or Rs.5,00,000 in a single financial year in banks and post offices.
Paying a total amount of Rs.50,000 in a financial year for more than one prepaid payment instruments like smart cards, online wallet, mobile wallet etc.
While paying insurance premium policies of Rs.50,000 or more during a financial year.
While selling or purchasing various securities (except shares) worth of more than Rs.1 lakh in a single transaction.
While selling or buying any immovable assets through stamp valuation authority for more than Rs.10 lakhs.
Involving in buying or selling activities of any goods or services worth above Rs.2 lakhs in a single transaction.
Buying or selling of a company’s share at a value of more than Rs.1 lakh in a single transaction, which does not belong to any recognised stock exchange.

Applying for PAN

PAN applications can be submitted at PAN facilitation centres that are available in every Indian city/town operating under UTITSL (UTI Infrastructure Technology and Services) and NSDL (National Securities Depository Limited). In addition, a person can also register and get his PAN card through the online mode. To obtain PAN, PAN application form 49A provided by income tax department must be submitted online or at a PAN facilitation centre.

PAN Application Form 49A

PAN application must be submitted in Form 49A.

How to Fill Form 49A

Follow the steps mentioned below to complete and submit the Permanent Account Number application form 49A:

The individual who is supposed to use the PAN card must give their last/surname with First and Middle name in the respective order, the name will be printed as it is given in the form 49A.
If the person is an Aadhaar cardholder then the Aadhar must be mentioned mandatorily by the user.
The person has to mention their source of income, if the person has no source of income then it has to be mentioned in the separate column.
The details of the applicant representative must be given according to the Section 160, of Income Tax Act 1961, according to this act if the applicant is a minor or mentally challenged person, then the details of the representative who takes care of minor needs to be filled in the form. Also, the proof of identity and address of the representative must be submitted with Form 49A.
The application must be signed and verified by the applicant or representative.
Once the application form is submitted, a unique number will be created and given to the user to track the status of the PAN document processing. Contact details will also be given in the application form to resolve the queries.

Once the PAN application is prepared, the applicant can sign the application form, online or manually. If the applicant opts for online signature, then the applicant can upload the entire application form with the e-signature through the computer or the signature can also be attached through Aadhaar based e-sign. Aadhaar based e-sign is possible if the mobile number of the user is registered with their Aadhaar card number. Using this e-Aadhaar option the user can sign in the application form and once the form is signed it will get verified through OTP (One Time Password) generation through UIDAI (Unique Identification Authority of India). Once the OTP is entered by the applicant, the application form gets submitted.

Government Fee for PAN Application

A fee of Rupees 107 must be paid for PAN application or to make changes in PAN card, inclusive of GST. This payment can be made online using credit, debit cards or net banking. An individual can pay for themselves, parents, spouse or their children. Demand draft method of payment is also available. These options are provided by authorized service providers like UTIITSL and NSDL.

Tracking PAN Application

A unique 15- digit code will be generated on successful uploading of the application form. This unique ID will have details about the documents that need to be physically sent to the service provider. For most PAN applications, the following procedure must be followed

Completed Form 49A must be downloaded and printed with two photographs of the applicant according to the size given in the application form.
Thumb impression or signature must be provided by the applicant across the photo affixed in the given area.
The signature or the thumb impression must not exceed the box available for the purpose.
Finally, the signature and document must be attested by a Gazetted Officer.

Corrections in PAN

If the PAN holder has any corrections or changes in the provided PAN card, it has to be mentioned in a separate form and it must be re-submitted with identity proof, address proof and all other details. PAN changes and corrections can also be carried out online.

Returning or Cancelling PAN card

If an applicant by mistake has requested or obtained more than one PAN card, then he/she must cancel a PAN. Every person is eligible to have only one PAN card. In case any person is found having more than one PAN card, a fine of Rs.10,000 will be levied. To return or cancel a PAN, a separate form must be filled attached with a descriptive letter of mentioning the applicant’s complete details and the reason for cancelling the Permanent Account Number.

Is PAN Mandatory?

The Income Tax Department has mandated the use of PAN on the return of income on all tax-related transactions. PAN is an integral aspect when it comes to tracking the transactions and monitoring the inflow and outflow of an individual’s money.

Also, the government has mandated the linking of PAN with Aadhaar.

FAQs on PAN Card

How can I get the information in my PAN database rectified?

You can simply visit the official Protean e-Gov Technologies Limited (formerly NSDL) portal and log in using your credentials to request the changes for your PAN.

Where should the PAN Card application form be submitted

The PAN Card application form, once duly filled in and self-attested, can be submitted along with all relevant documents to any one of the PAN Centers or TIN-FCs that are managed by Protean e-Gov Technologies Limited (formerly NSDL).

How long is a PAN valid after it is allotted?

A Permanent Account Number or PAN is valid for a lifetime. Once it has been issued to a user, it will be unaltered throughout his or her lifetime.

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