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What is a PAN or Permanent Account Number?
The Permanent Account Number (PAN) is a method of identifying different taxpayers in the country. PAN Card is a 10-digit alphanumeric identification number (including both alphabets and numbers) issued to Indians, mostly those who pay taxes.
PAN identification refers to a computer system that issues a unique identification number to each Indian tax-paying organization. All tax-related information for a person is recorded using this manner against a single PAN number, which serves as the primary key for information storage. Because this is shared across the country, no two persons or tax-paying businesses can have the same PAN.
When a PAN is assigned to an organization, the Income Tax Department also issues a PAN Card. While your PAN is a number, your PAN Card is a tangible card that includes your PAN as well as your name, date of birth (DoB), and portrait. Copies of this card can be used as proof of identification or date of birth.
The History of PAN in India
Before the introduction of the PAN idea, taxpayers were allocated a GIR number. This was essentially a manual system that was unique only under the supervision of a certain evaluating officer. However, the figure was not unique at the national level. Because GIR is not unique, there is a larger risk of miscalculation and mistakes, as well as incidents of mistaken identity during tax assessment.
The Assessing Officer assigned a taxpayer a GIR number, which included the Assessing Officer’s information.
The idea of PAN was introduced by the Indian government in 1972 and made statutory under section 139A of the Income Tax Act of 1961. PAN, which was initially optional, was made mandatory for all tax-paying persons in 1976.
The original PAN number allotments were done manually, and each ward/circle received a unique set of numbers to minimize duplication. This series was discontinued in 1995.
The PAN Number Format
1) The full name of the cardholder.
2) The cardholder’s father’s name.
3) Pan number digits: it has a 10-digit alphanumeric permanent account number.
4) Sign of the cardholder.
5) Date of birth.
6) A photograph of the cardholder.
7) The hologram of the Government of India along with the tag of the Income Tax Department.
Uses of PAN Card
- When paying direct taxes, the PAN must be quoted.
- When filing income tax, taxpayers must include their PAN.
- PAN information must be provided while registering a business.
- PAN information is required for many financial operations. These are some of the transactions:
- Purchase or sale of property (immovable) of Rs.5 lakh or more
- Purchase or sale of a vehicle other than a two-wheeler
- Payments made to hotels and restaurants that exceed Rs.25,000
- Payments paid in conjunction with international travel needs. If the sum in this scenario exceeds Rs.25,000, you must provide your PAN.
- Payments in excess of Rs.50,000 for bank deposits
- Purchase of bonds worth at least Rs.50,000
- Buying of shares worth at least Rs.50,000
- Purchase of an Rs.50,000 or more insurance policy
- Investing in mutual funds
- Payments of more than Rs.5 lakh made for the acquisition of jewelry and bullion
- To transfer funds out of India
- Transferring money from an NRE account to an NRO account
Benefits of the PAN Card
- PAN Cards are essential for taxpayers since they are required for all financial activities and are used to track the input and outflow of your money. It is necessary for paying income taxes, getting tax refunds, and communicating with the Income Tax Department.
- Because the PAN Card contains information such as name, age, and photograph, it may be used as legal identity evidence throughout the country.
- The PAN is the greatest way to keep track of your tax payments. Otherwise, because your tax payment cannot be validated, you may be obliged to pay it many times.
- Because each entity’s PAN is unique, it is nearly hard to use it for tax evasion or other nefarious purposes.
- PAN Cards may be used to obtain utility services such as power, phone, LPG, and internet.
How to Apply for the PAN Card
The PAN Card can be applied for through two websites online:
You can also apply offline at any of the PAN agents at the district level. You can apply for a new PAN as well as make corrections or changes to your existing PAN. If you lose your PAN Card, you can even request a duplicate or reprint the card.
Indian nationals and NRIs (including corporations, NGOs, partnership businesses, municipal organizations, trusts, and so on) must complete Form 49A to obtain a new PAN. Form 49AA is required for foreigners and foreign companies. These forms should be sent to the Income Tax PAN Services Unit, together with the appropriate PAN papers.
When you apply for a new or duplicate PAN or seek corrections/changes, you may trace the status of your application using the acknowledgment number.
According to the NSDL website, the complete process of printing and shipping cards takes about 2 weeks or 14 days.
- Fill in all of the information based on the identification and address proof papers you’re providing.
- To prevent disqualification, get your thumb imprint verified by a Magistrate/Notary before completing the form.
- Fill out the form with your entire address and proper contact information.
- Fill out the application form entirely in capital characters.
- Make no changes or overwrite anything on the form.
- In the first and last name columns, do not use initials.
- If your existing PAN card has been lost, stolen, or defaced, do not apply for a new one. Instead, request a duplicate PAN.
PAN Card – FAQs
Q1. How many digits are in the pan card?
The Income Tax India PAN Card has a ten-digit alphanumeric number, which is known as the PAN. PANs are given out in the form of a laminated plastic card (commonly known as a PAN card). The final character, i.e. the tenth, is an alphabetic check digit.
Q2. How to use a PAN Card?
Proof of Identification: A PAN card is recognized as legitimate evidence of identity and proof of age across the country. It may also be used as identification evidence when applying for a passport, voter ID, driver’s license, or an electrical connection, among other things.
Q3. Should I provide my email address or phone number on the form?
All applicants are required to submit either their email address or a phone number in the PAN application form so that they may be reached in the event of a discrepancy. It is also beneficial when the applicant obtains the PAN by email.
If the applicant provides a landline number, the country code and STD code should be included. If a mobile number is provided, the country code should be included.
In case the applicant provides an email address, the PAN will be emailed to him or her.
Q4. Are there charges for the PAN application?
No. The application form is available free of cost.
Q5. When I submit my PAN application form at a TIN-FC, will I receive an acknowledgment?
Yes, you will be sent an acknowledgment with a unique 15-digit number.