Permanent account number

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Permanent Account Number

A sample PAN Card
Agency overview
Formed 1961
Jurisdiction Indian Income Tax Department
Headquarters New Delhi
Website www.incometaxindia.gov.in/PAN/Overview.asp

Permanent Account Number (PAN) is a code that acts as identification of Indians, especially those who pay Income Tax. It is a unique, 10-character alpha-numeric identifier, issued to all judicial entities identifiable under the Indian Income Tax Act 1961. An example number would be in the form of AAAPL1234C. It is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and it also serves as an important proof of identification.[1]

Like the Aadhaar Number and Driving License, it is also issued to foreign nationals (such as investors) subject to a valid visa and hence, it is not acceptable as a proof of Indian citizenship.

The PAN is mandatory for a majority of financial transactions such as opening a bank account, receiving taxable salary or professional fees, sale or purchase of assets above specified limits etc; especially high-value transactions.

The primary purpose of the PAN is to bring a universal identification to all financial transactions and to prevent tax evasion by keeping track of monetary transactions, especially those of high-net-worth individuals who can impact the economy.

The PAN is unique to each individual and is valid for the life time of the holder, throughout India. An important point to note would be that once issued, the PAN is not affected by a change of address.

Physical appearance[edit]

The modern day PAN takes the shape of the standard plastic bank-card. It bears a facial picture of the holder, the date of birth, the date of issue and a hologram sticker, which acts as an additional security feature. The card does not bear address of the holder. However, the letter accompanying the PAN upon issue bears the address of the holder. Thus, the PAN card coupled with the letter together may be accepted as address proof by a service provider (bank, RTO, etc).

PAN cards for minors, issued through UTI-ITSL do not bear photo nor the date of issue.

PAN cards issued prior to 2001 were black & white and printed on laminated plain paper with a poor-quality photograph. Those cards are still valid. However, people who wish to do so can apply for the new plastic variant, bearing the same PAN, upon on payment of fee.[1]

Use of PAN[edit]

Quoting the PAN is mandatory when filing Income Tax returns, tax deduction at source, or any other communication with Income Tax Department. PAN is also steadily becoming a mandatory document for opening a new bank account, a new landline telephone connection / a mobile phone SIM card, purchase of foreign currency, bank deposits above Rs. 50,000/=, purchase and sale of immovable properties, vehicles etc.[2]

[3]

Obtaining PAN[edit]

Obtaining PAN is optional and voluntary like passport, driving license, Aadhaar etc. However, its use is mandatory at required places, like PAN for high-value financial transactions, Driving License for motor driving, passport for foreign travel etc.

One can apply for PAN by submitting the prescribed PAN application to the authorized PAN agency of the district or through online submission to NSDL along with 2 face-photos, ID proof, address proof and fee. In case of Re-print (re-issue), a photocopy of the old PAN is also required. Quoting Aadhaar Number attached with Aadhaar card is optional presently. However, it is recommended to provide Aadhaar letter now, if one has it, so that PAN gets linked to Aadhaar. It will save future effort of Aadhaar linking when it becomes mandatory. It takes about one month to receive the card and is sent by registered India Post.[4]

Structure and provisions[edit]

  • IT PAN card is issued under Section 139A of the Income Tax Act.
  • The PAN structure is as follows: AAAPL1234C: First five characters are letters, next four numerals, last character letter.
  • The first three letters are sequence of alphabets from AAA to ZZZ
  • The fourth character informs about the type of holder of the card. Each holder is uniquely defined as below:
A — Association of Persons (AOP)
B — Body of Individuals (BOI)
C — Company
F — Firm
G — Government
H — HUF (Hindu Undivided Family)
L — Local Authority
J — Artificial Judicial Person
P — Individual
T — AOP (Trust)
  • The fifth character of the PAN is the first character
    • (a) of the surname or last name of the person, in the case of a "Personal" PAN card, where the fourth character is "P" or
    • (b) of the name of the Entity, Trust, society, or organisation in the case of Company/ HUF/ Firm/ AOP/ BOI/ Local Authority/ Artificial Jurdical Person/ Govt, where the fourth character is "C","H","F","A","T","B","L","J","G".
  • The last character is an alphabetic check digit.

Nowadays, the DOI (date of issue) of the PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card.

The central government has introduced a new online service called "Know Your PAN" to verify or validate new and existing PAN numbers.[5]

Failure to comply with the provisions of Section 139A of Income Tax Act, penalty of Rs. 10,000/- for each default is payable u/s.272B by Assessing Officer.[6]

Operating model[edit]

The issuance of PAN, verification, delivery and maintenance works on public private partnership (PPP) model like passport seva kendra (PSK) for reasons of economy, efficiency and effectiveness. It is operated by private companies (e.g. Karvy Consultancy, Alankit Assignments, Religare Securities, Integrated Registry, CAMS associates with NSDL and Bajaj Capitals,100 others) for processing of applications, collecting, handling and verifying personal documents like proof of ID, age and address, clarification with the applicants, printing the card and the letter and then mailing it. The processing agencies obtain the new PAN number online from the server of the income tax department after successful processing of the application documents. Some critiques in India may call the handling, processing and delivery of personal ID and financial documents by private contractors as violation of privacy, however it is not so.[7][8][9][10]

Online application facility for obtaining PAN[edit]

For the net savvy users, it is very easy to make application online at the websites of NSDL e-Governance or UTIITSL. Brief process note as available on NSDL e-Gov's TIN website is really useful. The online application in brief is as under: 1. Go to the websites of NSDL e-Gov[11] or UTIITSL [12] and submit application details online (No other entity is authorized by ITD to provide online PAN application facility) 2. Submit application details online 3. make online payment of application fee. 4. On successful submission and acknowledgement receipt is generated. Save and print the receipt, affix recent photographs over it and sign it in the space provided on the receipt. 5. Forward same to NSDL e-Gov or UTIITSL (as applicable) alongwith supporting documents (POI,POA, Date of Birth documents) for further processing. 6. Status of your application then can be traced online.

Concerns with PAN Cards[edit]

Although there are only 30 million (3 crore) income tax payers in India, yet there are 170 million genuine PANs issued as of 2014.[13] While the alphanumeric PAN number is unique, individuals and corporate entities have been able to obtain multiple PAN cards fraudulently. It is illegal to obtain multiple PANs and there is a penalty of Rs.10,000/= when caught. In addition, there are fake PAN cards due to ubiquitous plastic card printers.[14][15][16][17][18] Additionally, illegal immigrants have also got PAN cards issued to them; most have used the services of PAN card agents.[19][20][21][22][23][24][25]

See also[edit]

References[edit]

Apply online for PAN (Form 49A for Indian citizens) https://tin.tin.nsdl.com/pan/form49A.html

Apply online for PAN (Form 49A for foreign citizens) https://tin.tin.nsdl.com/pan/form49AA.html

Brief guidelines on online PAN application https://www.tin-nsdl.com/download/home/Online-PAN-Application-Final-Brief-process.pdf

External links[edit]