Overview of PAN Card
The PAN (Permanent Account Number) card is issued by the Income Tax Department, Government of India, serving as a unique identification number for individuals and entities.
This PAN number acts as the primary identifier for storing tax information and is universally recognized across the country. Consequently, no two taxpayers can possess the same PAN, ensuring the uniqueness of each entity within the tax system.
Since its inception in 1972, the PAN system has become a cornerstone of financial identification in India. With a lifetime validity, the PAN card is a crucial document for various financial transactions, including filing income tax returns, opening bank accounts, and engaging in property transactions.
Applying for a PAN card involves a nominal cost of Rs. 110, making it accessible to a wide range of individuals and entities across the country. The Income Tax Department operates a dedicated customer care number (020–27218080) to assist with PAN-related inquiries and support services.
Over the years, the PAN system has seen significant adoption, with approximately 25 crore enrolments recorded, highlighting its widespread usage and importance in India’s financial ecosystem. As a foundational element of financial identification, the PAN card continues to play a crucial role in facilitating transparent and compliant financial transactions nationwide.
Eligibility for PAN
PAN Cards are issued to a diverse range of entities, including individuals, companies, non-resident Indians (NRIs), and any other entities liable to pay taxes in India.
Types of PAN
Below are the different types of PAN card:
- Individual
- Company
- HUF-Hindu undivided family
- Trusts
- Firms/Partnerships
- Foreigners
- Society
Documents Required for PAN
For PAN applications, two types of documents are required: Proof of Address (POA) and Proof of Identity (POI). Any two of the following documents can be submitted to meet the criteria:
| Individual | POA/POI: Voter ID, Aadhar, Passport, Driving licence |
| Company | Registration Certificate issued by the Registrar of Companies |
| HUF-Hindu undivided family | An affidavit from the head of the Hindu Undivided Family (HUF) was provided with proof of identity and address details. |
| Trusts | The Certificate of Registration Number or a copy of the Trust Deed issued by a Charity Commissioner. |
| Firms/Partnerships (LLP) | A Certificate of Registration is issued by the Registrar of Firms and Limited Liability Partnerships along with the Partnership Deed. |
| Foreigners | Passport, PIO/OCI card issued by the Indian Government, bank statement from the country of residence, and a copy of the NRE bank statement in India. |
| Society | Certificate of Registration Number issued by the Registrar of Co-operative Society or Charity Commissioner. |
How to Register for a PAN Card
Whether online or offline, you can register for a PAN in just three easy steps.
- ONLINE
- Visit the UTIITSL or NSDL websites.
- Fill form, submit as well as pay the processing fee.
- PAN will be sent to the provided address.
- OFFLINE
- Get an application from an authorised PAN centre.
- Fill out the form, attach the required documents, and submit along with the processing fee.
- A PAN will be sent to the given address.
Structure of PAN Card
A PAN card serves as a crucial document, encompassing details vital for identity verification and adherence to Know Your Customer (KYC) regulations. Here’s a breakdown of the key information contained within a PAN card:
- Cardholder’s Name: Whether an individual or a company, the PAN card features the name of the cardholder.
- Father’s Name (for individual cardholders): This information is included for individual cardholders.
- Date of Birth: For individuals, their date of birth is recorded, while for companies or firms, it’s the date of registration.
- PAN Number: Comprising a 10-character alpha-numeric code, each character carries specific information about the cardholder.
- First Three Letters: These alphabetical characters range from A to Z.
- Fourth Letter: Designates the taxpayer category, with distinct characters assigned to different entities such as:
- 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
- Fifth Letter: Represents the initial letter of the individual’s surname.
- Remaining Characters: Consist of four numerical digits followed by an alphabetical character, arranged randomly.
- Individual’s Signature: The PAN Card also serves as proof of the cardholder’s signature, a requisite for various financial transactions.
- Individual’s Photograph: For individuals, the PAN card doubles as photo identity proof. However, for companies and firms, photographs are not included on the card.
What is the purpose of requiring PAN?
PAN, an acronym for Permanent Account Number, serves as a distinctive identification code essential for every taxpayer in India, offering the following functionalities:
- Verification of Identity
- Confirmation of Address
- Compulsory for Tax Filing
- Facilitation of Financial Transactions
- Business Registration
- Authorization for Bank Account Operations
- Acquisition of Gas Connections
- Establishment of Phone Connections
- Mutual Fund Investments – PAN facilitates e-KYC processes for mutual fund transactions.
In the Union Budget of 2019, there was a proposal suggesting the substitution of Aadhaar for PAN in income tax return filings, effective from September 1, 2019. Additionally, the budget proposed that Income-tax officers could autonomously allocate PAN to taxpayers who opt for filing returns using Aadhaar.
PAN for e-KYC (know your customer)
Linking your PAN to Aadhaar is a necessary step for e-KYC and verification processes to access services and benefits offered by various service providers. PAN is widely used for e-KYC purposes by numerous service providers, offering significant advantages for both users and the government. Here’s why:
- Paperless: The e-KYC process operates without the need for physical documents, allowing service providers to handle documentation efficiently and conveniently.
- Secure: Information exchanged between users and service providers is transmitted as tamper-proof digital documents through secure channels, ensuring the protection of the holder’s data. These documents are immune to forgery and unauthorized usage, requiring consent from both the service provider and the PAN card holder.
- Quick: PAN card holders can transmit information securely to service providers within minutes, eliminating the lengthy waiting periods associated with physical document submissions.
- Cost-effective: The entire process is conducted online and without the need for physical document handling, resulting in cost savings and time efficiency by eliminating the physical movement of information.
- Authorized: The data shared through e-KYC is authenticated, making it legally valid and acceptable for all parties involved in the transaction.
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FAQ’s
PAN is a distinctive alphanumeric code comprising ten digits, issued by the Income Tax Department. Here’s how PAN is formed:
- The first five characters consist of an alphabetic series ranging from AAA to ZZZ. For example, in “ALWPG5809L,” “ALWPG” represents this series.
- The fourth character signifies the status of the PAN holder. In the example “ALWPG5809L,” “P” represents this status.
- “A” represents the Association of Persons (AOP).
- “B” represents the Body of Individuals (BOI).
- “C” represents the company.
- “E” represents Limited Liability Partnership.
- “F” represents Firm.
- “G” represents Government Agency.
- “H” represents Hindu Undivided Family (HUF).
- “J” represents Artificial Juridical Person.
- “L” represents Local Authority.
- “P” represents an Individual.
- “T” represents Trust.
- The fifth character represents the first character of the PAN holder’s last name or surname for individuals. For non-individual PAN holders, it represents the first character of the PAN holder’s name. For instance, in “ALWPG5809L,” “G” is the fifth character.
- The next four characters consist of sequential numbers ranging from 0001 to 9999. In “ALWPG5809L,” “5809” is the sequential number.
- The tenth character serves as an alphabetic check digit. In “ALWPG5809L,” “L” is the check digit.
Combining all these elements results in the PAN’s unique identity.
PAN is required to be obtained by the following individuals:
- Any person whose total income or the total income of any other person in respect of which they are assessable during the previous year exceeds the maximum amount not chargeable to tax.
- Charitable trusts are required to furnish returns under Section 139(4A).
- Individuals engaged in any business or profession with total sales, turnover, or gross receipts are likely to exceed five lakh rupees in any previous year.
- Importers and exporters are required to obtain an Import Export code.
- Individuals are entitled to receive any sum or income after deducting tax at source.
- Individuals liable to pay excise duty, producers or manufacturers of excisable goods, registered persons of private warehouses storing excisable goods, and authorized agents of such persons.
- Individuals issuing invoices under Rule 57AE require registration under the Central Excise Rules, 1944.
- Individuals are liable to pay service tax, as are their agents.
- Individuals registered under the general sales tax or the Central Sales Tax Act law of the relevant state or union territory.
- Individuals intending to enter specified financial transactions where the quotation of PAN is mandatory.
Individuals seeking to acquire a PAN (Permanent Account Number) can initiate the process by completing and submitting the PAN application form (Form 49A/49AA), along with the necessary documentation and applicable fees, at either the PAN application center operated by UTIITSL or NSDL.
For Indian citizens, Indian companies, entities incorporated in India, and unincorporated entities formed in India, the appropriate form for PAN application is Form 49A. Conversely, for individuals who are not citizens of India, entities incorporated outside India, or unincorporated entities formed outside India, Form 49AA is to be used.
In instances where the applicant is a company not yet registered under the Companies Act, 2013, the request for a Permanent Account Number can be made using Form No. INC-7, as specified under sub-section (1) of Section 7 of the Act, for the incorporation of the company.
Alternatively, individuals can also opt for online application submission via the websites of UTIITSL or NSDL.
Upon acceptance of the application form, the applicant will be furnished with an acknowledgment containing a unique number. This acknowledgment number serves as a reference for tracking the application status, which can be done using the track status facility available on the above-mentioned websites.
The fee for obtaining a PAN is Rs. 93, plus any applicable Service Tax, per PAN application. If the PAN card needs to be dispatched outside India, the processing fee for the PAN application is Rs. 864, which includes Rs. 93 for application fees and Rs. 771 for dispatch charges. Additionally, any applicable Service Tax will be charged on these amounts.
For individual applicants, it is essential to furnish documents verifying proof of identity, proof of address, and proof of date of birth. The name provided in the application form must precisely match the name stated in the accompanying documents.
Additionally, individual applicants must attach two recent color photographs with a white background (dimensions: 3.5 cm x 2.5 cm) in the designated space on the form. It’s important not to staple or clip the photographs to the form, as the clarity of the image on the PAN card relies on the quality and clarity of the affixed photograph.