Pan Card: Importance, Types, Eligibility, Application Process, Benefits

PAN card stands for Permanent Account Number that gives a unique 10-digit alphanumeric ID. It is an electronic system of unique identification for each potential taxpayer.

It is provided by the Income Tax department. It is a great way to put an end to tax evasion. This can not be the same for everyone which means it is a unique number.

Pan Card

Pan Card is an electronic system that keeps the track of all the financial transactions of individuals who pay taxes. This card gives a unique identity to all of the people via a laminated card called a Pan card.

In addition, two entities can not have the same id. The department of Income Tax introduced this card to keep the record of all the potential taxpayers in India.

History of Pan Card?

There was the concept of GIR in India before the Pan card. GIR was not a unique number though and there were more chances of errors and mistakes in the calculations.

The system was manual and only the assessing officer and the GIR were allotted to the people. It also had the officer’s information too.

In 1972, the Indian government added the concept of a Pan card under the Income-tax act and made it mandatory under section 139A.

It became necessary for all the tax-paying individuals in 1976. Initially, the government allotted the numbers manually, and to avoid duplication, each circle/ward received a number of series.

What is e-PAN?

The Indian income tax department introduces an e-PAN card for individuals who are coming to pay their taxes for the first time. The e-pan card is introduced recently and the responsible departments provide instant numbers. Furthermore, it is a free service to each individual. However, it is not allotted to the people who already hold a pan card.

Who Issues PAN Card?

PAN card is issued by the government of India along with the assistance of the district-level Pan agencies such as UTI ITSL and PROTEAN eGov Technologies Limited.

In addition, there are many Pan card centers and TIN facilitation centers in India that issue Pan cards to the people. The process of issuing the Pan card is strongly based on the PPP model.

This is to ensure the economy maintenance, effectiveness, and efficiency of managing the Pan applications.

Why Pan Card is Important? Is it necessary to have a Pan Card?

Pan card’s primary objective is to introduce unique identification to all the transactions of Indian taxpayers.
Besides that pan card tracks the taxpayers and all their financial transactions, it is also used as an identity for Indian individuals. However, it is not its primary job but it does play a role that way too.

Furthermore, it is very important to have a Pan card because it keeps the track of all your financial transactions and inflow and outflow of money.

The government of India made it mandatory to have a pan card since it is the best solution to stop the tax dodging. Therefore, having a pan card is a reliable approach to paying taxes so the income tax department can have the record.

Types of PAN Cards

According to the income tax department, there are four types of pan cards.

1. PAN Card for Resident Individuals

Resident individuals and HUFs fall under this category of pan card. They have to fill 49A form to apply for the card.

This card contains information such as the picture of the cardholder, permanent account number, his name, father’s name, gender, QR code, date of birth, hologram, and signature.

Furthermore, the NRI also lies in this category with the same details. However, the Indian residents will also provide their Aadhaar numbers.

The Indian residents have to pay INR. 107 (inclusive of GST) for the application of a pan card. While the pan card for NRI’s includes the payment of INR. 1017 (inclusive of GST).

2. PAN Card for Indian Companies

The government of India has made provisions for organizations, partnership firms, trusts, etc to apply for pan cards through various pan card portals. The organizations can use NSDL or UTIITSL portals to apply for the card.

In addition, for the new pan card, the companies can apply through the MCA portal. This type of card contains information such as the company’s name, registration date, allotted Pan, QR code, date of PAN enrollment, and hologram.

The companies have to fill out form 49A if they are applying through NSDL or UTIITSL. In other cases, if a company is applying through the MCA portal then they have to write the common application.

However, if an organization wants to update or change the information on their pan card then they have to fill the Form 49A. They can use NSDL or UTIITSL portals for this.

3. PAN Card for Foreigners

Foreigners who want to start a business have to get this pan card so that they can have their financial transactions. They can apply online or offline by filling out form 49AA.

This card contains information such as photographs, permanent account number, name, father’s name, date of birth, signature, QR code, and hologram.

There is only one condition for him otherwise the rest of the things are the same for the foreigners as the Indian citizens. The foreigners will have to pay INR. 107 if he has any correspondence address in India.

Moreover, if he does not possess any address inside India then he will pay INR. 1017.

4. PAN Card for Foreign Corporates

Foreign companies who want to start a business in India need to get a pan card before they start it. These companies have to get a pan card before they invest in India.

They can apply through NSDL or UTIITSL portal online by filling out form 49AA. They also have to pay INR. 107 and will receive a pan card at the address they mention on the form.

Additionally, foreign companies have to submit the following documents.

• Copy of registration certificate for starting an office in India by the authorities.
• Copy of registration certificate of the location/country where the individual lives by the authorized officials overseas or attested by “Apostille” or by the Indian embassy.

Pan Card Eligibility – Who Can Get a Pan Card?

The eligibility criteria for a pan card cover the following aspects:

• Any individual who pays taxes is accountable to pay tax to the income tax department.
• The individual who runs a business that gives him a yearly turnover of more than 5 lakh is eligible for having a pan card to pay taxes.
• According to the income tax law, any importer or exporter is liable for paying the duty charges or paying tax.
• It also includes all the organizations, trusts, and charitable organizations.

All of the tax-paying entities such as minors, HUFs, individuals, partnerships, companies, trusts, and others are liable to pay tax using the pan card. Therefore, they must have one!

Documents Required for Pan Card

Pan Card is a mandatory requirement and so is the document to have one. Therefore, any individual who is applying to have a pan card should submit the following documents.

• Aadhaar Card
• Voter ID Card
• Passport

The documents and the application you submit for the pan card must be accurate and free from mistakes. This can lead to unsuccessful procedures and hence you can’t have the card.

How Much Does it Cost to Have a Pan Card?

The individual can make an online application through the Protean of Technologies website or the UTITSL portal. The cost of a pan card application is as follows:

• For the Indian individual address, the cost is INR. 107 (excluding GST)
• For the foreign individual address, the cost is INR. 1017 (excluding GST)

How to Apply for a PAN Card?

The government of India has made it more convenient for people to apply online for a pan card. Here are the simple steps on how to apply for a pan card through the NSDL portal:

• Step 1: Open the NSDL pan card website to apply for your new pan card.
• Step 2: Select the application type that suits you. It gives the options such as New PAN for Indian citizens, and foreign citizens, or for change/correction in existing PAN data.
• Step 3: Now select your category.
• Step 4: Fill in all the fields in the form such as name, DOB, mobile number, etc.
• Step 5: After submitting you will receive a message on what to do next.
• Step 6: Point the cursor and click the “Continue with the Pan Application Form” button.
• Step 7: The website will redirect you to the page where you will have to submit your e-KYC.
• Step 8: Select if you want a physical pan card or not and enter the last four digits of your Aadhaar card.
• Step 9: Now enter your personal details such as contact details in the form.
• Step 10: Next up, enter your area code, AO type, and some other details.
• Step 11: The application’s last section is document submission and declaration.
• Step 12: Enter the first 8 digits of your PAN card and click proceed.
• Step 13: Select the e-KYC option to verify via Aadhaar OTP. for the proof of identity, date of birth, and address, choose Aadhaar in all fields and click proceed.
• Step 14: The website will redirect you to the payment section where you can make the payment through demand draft or debit/credit card / net banking.
• Step 15: After the payment, a receipt will be generated. Click on continue.
• Step 16: Next, for Aadhaar authentication, check the declaration and select the “Authenticate” option.
• Step 17: Now click on “Continue with e-KYC” after which you will receive an OTP on your mobile number on Aadhaar information.
• Step 18: Insert your OTP and submit the form.
• Step 19: Now click on “Continue with e-Sign” then enter your 12-digit Aadhaar number. You will again receive an OTP on your number.
• Step 20: Lastly, enter your OTP and submit the application to have an acknowledgment slip in pdf form with your DOB as your password.

The applicant can also apply for a pan card through the UTIITSL portal while following these steps:

• Step 1: Visit the UTIITSL website and select the “PAN card for Indians / NRI” under Pan services.
• Step 2: Hit a click on “Apply for a new pan card (Form 49A)”.
• Step 3: Now, you can either choose “Physical Mode” in which you have to submit a printed-signed application at the nearest UTIITSL office or the “Digital Mode” where you can sign the application using Dsc mode. You can also use an Aadhaar-based e-signature.
• Step 4: Fill in all your personal and mandatory information in the given fields.
• Step 5: Verify the information in the fields for the correctness and hit the “Submit” button.
• Step 6: After the verification, you can go ahead to make payment via BillDesk or PayU India. You can also pay through credit card, cash card, debit card, and net banking.
• Step 7: Fix 2 passport-size photographs (3.5 * 2.5 cm) on the printed form and put your signature on the spaces.
• Step 8: at the end, attach a copy of your address, identity, DOB proof documents, and application and send it online or to the UTIITSL office.

How to Apply for Pan Card Offline?

There is no doubt that online systems are more convenient and people use them frequently to issue a pan card. However, some people don’t know about the use of the internet. Therefore, they can visit the nearest NSDL, or UTIITSL center to apply offline for a pan card.

Here is how to apply for a pan card offline:

• Visit the website to download Form 49A.
• Fill out the form accurately and affix two passport-size photographs as per requirement.
• Pay the fee at NSDL / UTIITSL payable at Mumbai/UTIITSL.
• Attach the attested proofs of documents along with the form.
• Mention “APPLICATION FOR PAN-N-Acknowledgement Number” on the envelope of your application.
• The applicant will follow the following address to send this application form:
  • Income Tax PAN Services Unit
    NSDL e-Governance Infrastructure Limited,
    5th floor, Mantri Sterling, Plot No. 341,
    Survey No. 997/8, Model Colony,
    Near Deep Bungalow Chowk, Pune – 411016

Difference Between NRI PAN Card and Normal PAN Card

PAN Card is not necessary for all the NRIs although it is important for those NRIs who have a source of income in India. This will keep the record of their taxes.

But there is no difference between the NRI PAN card and a normal PAN card. They both are the same yet the procedure for applying is a bit different.

The NRI who has a residence in the Indian region as well can apply through Form 49AA.

Benefits of Pan Card

A permanent Account Number is a unique number that helps the government to keep the track of potential taxpayers. Here are the following benefits of the Pan card:

1. IT Returns Filing

All the entities who are eligible for paying taxes are applied to file their IT returns. It is necessary to have a pan card because filing IT returns is a primary reason for having a pan card.

2. Identity Proof

Pan card also serves the purpose of identity and all organizations, and financial institutions accept pan card as identity proof. Although its primary purpose is to keep the track of taxpayers.

3. Tax Deduction

One of the main important reasons for having a pan card is taxation. If an individual or an entity has not linked his pan card with their bank account and they have annual savings of more than 10000/-. Then the bank would deduct 30% instead of 10% out of the amount.

4. Claiming Income Tax Refund

Often times bank deducts more than the actual tax amount from an individual’s account. He has to pay more than he is supposed to. Therefore, to pay the exact amount it is important to link your pan card with the bank.

5. Starting a Business

To start a business it is important to have a pan card. The entity must link its pan card to its financial institute. This way it becomes easier to do business because a pan card lets the entity have a tax registration number.

6. Opening a Demat Account

Pan card is mandatory for an entity or individual to open a Demat account. This allows him to hold shares in dematerialized form.

7. Purchase and Sale of Immovable Assets

It is one of the benefits of a pan card for the individual to have it to make purchase and sale transactions. Furthermore, this card is a requirement to make transactions of sales and purchases of 10 lakh and more.

Summary

PAN stands for private account number which is a 10-digit unique number. It is a computerized system introduced by the authorities to the people of India. The structure of the pan card consists of five characters that are letters, four numerals, and the last character is a letter again. It is necessary to have a pan card for the potential taxpayers and it keeps a record of their financial transactions. Moreover, it helps to stop tax evasion and tax dodges.

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Frequently Asked Questions

Answer: PAN Card stands for Permanent Account Number.

Answer: The most common way to get your PAN card is by visiting the Income Tax Department's website and filing an online form.

Answer: The PAN card is necessary because it provides proof of identity, which is important for any kind of business transaction. The government mandates that individuals must have a pan card in order to be legally recognized as the owner of a business or to open up bank accounts, and it is also required for tax purposes.