An Overview of Permanent Account Number or PAN

A permanent Account Number (aka PAN) is a unique 10-digit code assigned to eligible taxpayers by the Income Tax Department. This 10-digit code entails both alphabets and numbers. The PAN system lets a tax authority keep track of taxpayers and their finances that fall under the tax regime. All the tax-based details of the taxpayer are recorded against an assigned PAN number.

Since PAN entails a unique code, it is assigned on an individual basis- meaning no two people can have a single PAN.

The allocation of PAN to an entity leads to a grant of a PAN card issued by the IT department. This card highlights key taxpayer information such as name, DOB, and father’s or spouse’s name. Plus, it has a taxpayer’s photograph.

The PAN card can serve as legit evidence in most government-based licenses and registration. It helps authorities affirm the applicant’s identity or DOB. Your PAN card does not have a limited validity.

Latest Updates on Permanent Account Number

On March 28, 2023, the Finance Ministry announced the extension of the deadline for PAN-Aadhaar linking till June 30, 2023. The citizens are required to complete this undertaking on the IT department portal and against a fee of Rs 1000.

If someone missed this extended deadline, their PAN shall become non-functional. But, it can be reactivated within 30 days upon intimation of the Aadhaar to the competent authority.

Types of PAN Cards

PAN cards are accorded to various entities falling under the tax regime. This is what serves as a ground for PAN classification. The following types of PAN are available in the status quo:

• PAN Card for Indian Individuals
• PAN Card for Indian Entities
• PAN for Foreign Nationals
• PAN for Foreign Entities

PAN Cards issued to individuals carry information like name, DOB, signature, issuance date, etc. PAN issued to entities does not have the photograph or signature.

Who is the issuing authority of PAN cards?

PAN Card is accorded by the Income Tax (aka IT) Department with the assistance of recognized district-level PAN agencies, Protean eGov Technologies Limited, and UTI Infrastructure Technology and Services Limited.

There are many TIN-facilitation and PAN centers pan India that work under Protean eGov Technologies Ltd and let users secure their PAN.

The process concerning PAN facilitation operates on a model called PPP (Public Private Partnership). This model helps with the seamless processing and management of PAN applications.

Significance and Uses of a PAN

Securing a PAN card is an absolute mandate for taxpayers because it helps tax authorities to keep eye on your cash flow. PAN lets taxpayers pay taxes, receive tax refunds, and have correspondence with the IT department. PAN continues to remain a mandatory gateway to execute a large number of fiscal transactions.

The card holders can also use a PAN card as an identity proof to serve various purposes such as applying for a license or enrollment for a specific course or opening a demand account.

Common Uses of PAN in Financial Transactions

• The taxpayer needs to furnish PAN details while paying direct taxes
• PAN details need to be quoted while paying income tax.
• Furnishing PAN information is vital for company registration or incorporation
• Almost every type of financial transaction requires PAN information.

What are the benefits of having a PAN from a Taxpayer’s standpoint?

• Since a PAN card entails basic information, including the contact details of the taxpayer, it can serve as a legit identity proof.
• PAN helps orchestrate tax payments and keep all past transactions intact, helping taxpayers to keep up with financial dynamics.
• Since PAN has a unique code, its duplication or misuse is practically impossible.
• PAN can help sign up for different utility connections such as telephone, power connection, gas, and internet.
• Opening of bank account becomes hassle-free with a PAN card at your disposal
• A PAN card also comes in handy when taking a vital decision like a property purchase.
• It can help get a new credit card from designated banks.

How PAN is different from TAN and TIN?

TAN (aka Tax Deduction and Collection Account Number) refers to a 10-digit number issued to taxpayers and entities who collect and deduct tax on payments made as a part of TDS falling under the IT Act. Taxpayers need to quote it while applying for TDS challans made to dispense the refund and certificates. Failing to do so can incur a monetary penalty.

TIN (aka Taxpayer Identification Number), on the contrary, is an 11-digit number that establishes dealers’ identity falling under the VAT regime. Granted on a state-wise basis, it is mandatory for eligible taxpayers (be it an entity or a trader, or a dealer) to secure a TIN. This number is essentially found on invoices, orders, or quotations.

Who is mandatorily required to secure a PAN?

• As per 139A of the Income Tax Act, the following falls under the ambit of the Permanent Account Number:
• Any person that falls under the tax regime formulated by the IT department shall require to secure a PAN card. It is advisable to ascertain the tax slabs for the same.
• Any person having a business or performing professional practice with a yearly turnover of Rs 5 lacs in any assessment year.
• Importers and exporters who are obligated to furnish any form of tax or duties
• Any kind of philanthropic entity or trusts
• All tax-paying entities including HUFs, individuals, companies, trusts, bodies of individuals, and others.

What are the consequences of not having a PAN Card?

If the eligible taxpayer chooses to skip the Pan card, he/she may encounter the following consequences:

• 30 percent tax deduction on earnings and wealth shall come into effect. This condition applies to every taxable individual, entity, overseas national, and entity situated abroad.
• The possibility of buying any automobile, or immovable property worth exceeding Rs 10 lac will become zero.
• Opening a bank account shall not be possible without a PAN
• Businesses cannot execute a large pool of fiscal transactions or procurement.

How can a Taxpayer apply for a PAN Card?

The eligible taxpayer can visit the following portals to apply for a PAN card:

• Protean eGov Technologies Limited (formerly NSDL)
• UTIITSL

There is an offline mode as well to serve this purpose. In this mode, the applicant needs to visit the district-level PAN agencies to apply for a PAN.

The PAN card holders can make changes in their PAN as and when required. The tax authority also issues a duplicate PAN card in case the cardholder lost their original PAN.

What types of forms are available for PAN card application filing?

The following are the different forms for PAN card application filing:

Form 49A

Form 49A serves as an application to apply for a new PAN. Indian taxpayers and NRIs (including NGOs, companies, trusts, local bodies, etc) must fill out this form.

Form 49AA

Form 49AA is needed to file by overseas nationals and entities. These forms are required to be submitted to the Income Tax PAN Services Unit along with some mandatory paperwork.

The tax authority provides the applicant with an acknowledgment number to track the application progress or status, be it a grant of a new PAN or authorizing changes made to the existing PAN.

Mandatory paperwork to apply for a PAN Card

Filing a PAN card application also requires the submission of mandatory paperwork, which goes along with Form 49A or 49AA. The section below shows the list of documents that one must share with authority without fail.

Documents for an individual applicant

• Identity proof such as DL, Aadhaar, Voter ID, etc.
• Address proof such as water bill, power bill, credit card statement, bank account statement, DL, marriage certification, etc.

Documents for Hindu Undivided Family (HUF)

• Affidavit accorded by the HUF’s Karta. It must reflect the name, address, and father’s name.
• Individual applicants falling under HUF must submit address proof, identity proof, and date of birth proof.

Documents for companies, partnership firms, and Trusts

• Copy of certification of incorporation accorded by the MCA (for companies falling under the Companies Act, 2013)
• Partnership Deed (for partnership firm)
• Registration Certificate Number (for trusts)

Documents for Association of Persons

Agreement copy or registration number accorded by the Charity Commissioner or Registrar of Co-operative Society.

Documents for foreign nationals

• Identity proof such as a copy of OCI, passport copy, or copy of PIO issued by the competent authority.
• Address proof in the form of a bank statement, copy of VISA, certificate of registration accorded by FRO, etc.

How to file an online application for a PAN card?

The section below entails the online process to apply for a brand new PAN card:

Step 1: Visit the NSDL portal and choose the application type

Step 2: Select an apt category

Step 3: Enter your name, DOB, and contact details in the relevant field.

Step 4: Read and accept the terms and conditions

Step 5: Complete the Captcha verification and hit the Submit button.

Step 6: The new page shall prompt on your screen. Here you will come across an acknowledgment number.

Step 7: On the next window, enter the apt information.

Step 8: Lastly, upload the paperwork (as discussed in the next section) and complete the payment formalities concerning an application fee.

What is the offline procedure to apply for PAN Card?

Following are the detailed steps that will let you apply for a PAN card in an offline mode:

• Head to the NSDL portal and explore the PAN option cited under the Download option.
• The new window shall open on your screen. Click on Form 49A on this page.
• Download this form on your system and then print the hard copy of the same.
• Fill out the form with the legit information and attach the mandatory paperwork along with the passport-sized photos.
• Submit the registration fee via DD enclosing the relevant amount in favor of “Protean eGov Technologies Limited”.
• Club the application and paperwork as a single unit and packed them into an envelope. Note: The envelope should reflect the phrase- ‘APPLICATION FOR PAN-N-Acknowledgement Number’
• Send the envelope to the Income Tax PAN Services Unit,

You will be provided with an acknowledgment number which will help you track the application progress.

How can I apply for a Duplicate PAN Card?

Those who have lost their PAN card for any reason can apply for a duplicate one in the following way:

1. Head to the UTIITSL portal
2. Get access to the form namely Form 49 A. (Note: if you are an overseas applicant, select form-49 AA)
3. Fill up the form with the required details and upload the paperwork if prompted.
4. Next, head to the payment section to submit the fee. (Note: You can also demand a draft for this purpose).
5. Download the form and take out the print.
6. Send the hard copy to the Income Tax PAN Services Unit,

How to make corrections or changes to a PAN Card?

In such a case, you will be required to follow the given steps carefully:

1. Visit the NSDL portal and choose the option namely- ‘Changes or Correction in existing PAN Data/ Reprint of PAN Card
2. Enter the required information and click the Submit tab.
3. Tap on the option namely- ‘Continue with PAN Application Form
4. Enter the required information in the following window
5. Choose the mode of application submission
6. Select the type of PAN and enter your contact detail
7. Upload the required paperwork and tap the “submit” button
8. Submit the fee.
9. The revised PAN shall be sent to your address within a couple of days.

What are the potential benefits of PAN e-KYC?

PAN opens a doorway to e-KYC, which has become a primary and the most secure way of establishing an identity of a customer. Countless service providers use this method of customer vetting in the status quo.

In essence, the e-KYC via PAN renders the following benefits:

Prompt processing

With a PAN in place, you can provide a service provider with the required details at blazing speed. This can pave the way for quicker processing.

Hassle-free

Since PAN e-KYV requires no paper, it enables seamless management of details and paperwork.

Authorization

With PAN e-KYC, whatever data is shared between the concerned parties stays authentic and secured.

Secured data

PAN e-KYC mitigates the scope of third-party intervention or breaches thanks to the encrypted channel. That means data during transit shall remain safe no matter the situation. And without the parties’ consent, no data shall be transferred. However, for successful e-KYC, PAN should be linked with your Aadhaar.  

How to perform PAN Card Enquiry, Tracking, or Online Status Check?

You can undergo the following steps to track the PAN application and its progress through the specified portals:

• Visit Protean eGov Technologies Limited or the UTIITSL website to check the status of your PAN card. The application status will render updated information on the application's progress.
• On the portal, select the option concerning the application status
• Provide your 15-digit acknowledgment number in the relevant field
• The status of your PAN application shall appear on your screen.

Do's and Don'ts concerning PAN Application

As an applicant, you need to pay attention to the following facts to avert any chance of application rejection:

• Enter all the information concerning address and identity proof. Any mismatching shall be unacceptable.
• Your thumb impressive must be attested by the Magistrate/Notary
• Make sure the application entails the contact details
• Fill up the application in the uppercase.
• Avoid overwriting as it may lead to the application’s cancellation
• Avoid using initials in the first or name columns.

Connect with Corpbiz and secure your PAN in no time

Obtaining a Permanent account number is one of those legalities that taxpayers cannot overlook. It is because doing so can lead them to the zone where stringent penalties would come into effect. That is why qualified taxpayers must obtain the PAN as soon as possible.

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