Back in schools and colleges, teachers could easily differentiate between two Rahuls or two Poojas. But do you know how they could identify their students? They assigned a roll number to everyone in their class to mark their presence during attendance and exams—similarly, the PAN card identifies individual taxpayers in India.
PAN is just like a unique roll number assigned to each Indian taxpayer. It is a ten-digit alpha-numeric character. They are physical cards with details like your PAN, date of birth, photograph, father’s or spouse’s name and signature.
Let’s learn about the purpose, application process and uses of PAN cards.
What is a PAN number? PAN stands for Permanent Account Number. This number is uniquely generated and assigned to the card holders through a computer system. This number is mentioned on your PAN card.
A PAN card is a laminated card given to you in physical form. You can even download it in PDF form as an e-PAN card, which has lifetime validity. You can have only one PAN that acts as your identification as a taxpayer, which means that no two PANs can be the same.
Your PAN is used in KYC to open any bank account or make any investment. Thus, all your tax information can be accessed through your PAN.
There are numerous benefits of having a PAN card. Let’s understand them in detail.
Your PAN card has your PAN, photograph, name and signature. These combinations are unique for every individual. Therefore, you can use your PAN card as valid identity proof for different purposes. It is one of the identity proof KYC documents for opening a bank account, along with an Aadhaar card, Voter ID and more.
You need to provide your PAN card for banking activities like making a demand draft, banker’s cheque, pay orders, opening fixed deposits, applying for credit and debit cards, cash deposits and making cash payments (adding up to more than ₹50,000 in a financial year).
Your PAN card also has your date of birth, making it a valid document for age proof. Thus, it can act as an alternative to your birth certificate.
If you are eligible to pay income tax, you must file your income tax returns. You need to file your returns on or before the due date every financial year. For this and other tax actions like filing for refunds, it is mandatory to have a PAN card. Having a PAN card prevents tax evasion since all your financial information can be accessed by the government through your PAN.
It is also crucial to link your PAN card with your bank account to save taxes on your savings account interest. For instance, say you have earned an annual interest of more than ₹10,000 on your savings deposits. Here, you will have to pay higher taxes if you don’t have a PAN card. This rate would be 30 per cent TDS (tax deduction at source) without a PAN card; however, if you have linked your bank account with your PAN card, only 10 per cent TDS would be charged. This tax would be deducted on savings deposit returns above ₹10,000.
To start a business, you need a PAN card for company registration.
Like individuals, businesses too can have a PAN card. In fact, for those businesses paying GST (goods and services tax), their GST number is allocated based on their PAN and state of registration.
Moreover, you can get your TRN or Tax Registration Number only if you have a PAN.
To sell forex or to purchase a forex card, you need to have a PAN card. For any forex transaction above ₹50,000, furnishing PAN details is mandatory. Even when you travel abroad and wish to convert the Indian currency, you must give your PAN details.
You must furnish your PAN for any investment, whether in stocks, mutual funds, fixed deposits, or while buying physical gold jewellery.
For making equity investments, you need a Demat account. Similarly, to invest in mutual funds, you might have to register in the broker app. One of the essential details required during KYC registration is your PAN. Even for selling a real estate property, you need PAN details of both the buyer and yourself to be mentioned on the sale deed. Also, if you buy gold jewellery above ₹5 lakh in a financial year, you will have to register your PAN details while making the purchase.
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If you are making an insurance payment above ₹50,000 in a financial year, the income tax directives make it mandatory to mention PAN.
Your PAN can also be valid for getting utility connections like gas, telephone, internet, electricity and more.
That’s quite a lot of benefits, isn’t it? These benefits make the PAN card an essential document for taxpayers in India. Let’s see the eligibility criteria for a PAN card.
To have a PAN card, you should be an Indian citizen with a valid identity, date of birth, and address proof. If you are a Qualified Foreign Investor (QFI), you can apply for PAN in, but only through the depository portal. As a QFI applying for PAN, you must fill out form 49AA. You can have a PAN card, even if you are a minor. For minors, their parents can sign form 49A on their behalf. In this case, the identity, age, and address proofs of the parents will be required.
Are you eligible to have a PAN card? Let’s quickly look at the details of the application.
You can apply for a PAN card using the steps mentioned below:
If you have not been allotted a PAN card but wish to file income tax returns, you can generate your instant e-PAN card. You can do this through your Aadhaar and your mobile number registered with your Aadhaar. You can create your instant e-PAN card free of cost without filling out any form or submitting any physical documents.
Yes, it is mandatory to link your PAN with your Aadhaar. As per section 139AA of the Income Tax Act, 1961, any individual with PAN eligible to have Aadhaar must link PAN and Aadhaar. You are exempted from this rule only if you reside in Jammu and Kashmir, Meghalaya or Assam. This rule also doesn’t apply if the Income Tax Act, considers you a non-resident.
Have you ever imagined that a small blue card in your wallet had these many benefits? With the accessibility of your tax details and a host of benefits for transactions, banking and investing, the PAN card is an essential document required in your daily life.
There are two ways to get the PAN card application form. These are online methods and the offline method.
To get an instant e-PAN card online, you can generate one through your Aadhaar and get it without any fees, physical documents or in-person verification.
In both cases, you need to fill out form 49A. After you have submitted your application, you will receive an acknowledgement slip. There will be a fifteen-digit number on the slip. You can use this number to check your allotment status.
Yes, you can download your e-PAN card online. Both the NSDL and the UTIITSL portals have the facility to download e-PAN cards. You can download your e-PAN if your application is processed through the NSDL e-gov or UTIITSL.
Here are the charges for downloading your PAN card online:
If charges are applicable, you can make an online payment for the same through the portals.
Follow these steps to download your PAN card online:
Here are the eligible signatories of the PAN card:
Yes, it is mandatory to enter your email address and telephone number on the form. These details are compulsory irrespective of whether the process is online or offline.
You can change the photograph on your PAN card online and offline.
Once your application is confirmed, you will be allotted a new e-PAN card, a physical card, or both, based on your request.