What is PAN and why is PAN needed?
PAN stand for Permanent Account No. PAN is a 10-digit alphanumeric identification number (AAAAA1234A) issued to all individuals, companies, non-resident Indians or anyone who pays taxes in India. It’s one of identity proof which can be use as identity. The PAN card will be issued within 15-20 days from the date of application
Other important facts about PAN Number are listed below:
All the tax-related information of a person/company is stored against a single PAN across India.
No two persons/entity/organisation can have the same PAN number.
PAN card acts as a unique identity proof along with driving licence, aadhaar card voter ID, etc.
It is valid for a lifetime irrespective of any change in address of the cardholder.
Why PAN needed?
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, to receive a taxable salary, a new landline telephone connection / a mobile phone connection, purchase of foreign currency, bank deposits above ?50,000, purchase and sale of immovable properties, vehicles, jewellery etc.
Here are some examples:-
PAN card number is required while filing the income tax return.
Permanent Account Number is mandatory for opening a new bank account, Demat account, foreign currency purchases.
Register a new business.
Carry out transactions like sale and purchase of house property, etc.
Transfer money from NRE to NRO account.
Making payments of more than Rs 50,000 towards bank deposits.
Purchase of shares exceeding Rs 50,000 in value.
Any payment for insurance Policy above Rs 50,000 requires quoting of PAN number
Any purchase of bonds above Rs 50,000, etc.
PAN number is mandatory to apply for Visa, Credit Card, Bank loan, etc.
Can minor apply for pan card?
A minor cannot apply for PAN card herself directly. Parents, guardians or a representative assessee has to apply on her behalf. The form to use is form 49A which is the same one that adults also have to use. The PAN card will be issued within 15-20 days from the date of application. This has to be submitted along with identity proofs of the father or guardian; they will have to sign the form as well.
PAN also comes in handy if the minor is earning. Generally, a minor’s income is clubbed with the parent’s income. But in certain case, it is taxable in her hands, according to section 64 of the income-tax Act. For instance, the income of a “minor child suffering from any disability of the nature specified in section 80U” will be taxed in her hands. Further, income generated by a minor from manual work or skill, specialised knowledge or talent. In such cases, a PAN becomes mandatory. The child will also have to file her income tax return through a representative assessee.
Structure of PAN Number
Out of the 10 digits that it has, the first 3 characters consist of alphabets sequenced from AAA to ZZZ.
The 4th character gives information about the cardholder. Here is the list on the type of taxpayer/card-holder who is defined by a letter.
A stands for Association of Persons (AOP)
B stands for Body of Individuals (BOI)
C stands for Company
F stands for Firm
G stands for Government
H stands for Hindu undivided Family (HUF)
L stands for Local Authority
J stands for Artificial Judicial Person
P stands for Individual
T stands for Trust (Association of Persons)
E stands for LLP (Limited Liability Partnership)
The 5th character is a letter picked from the ‘Surname’ of the individual
Characters from 6-9 are random numbers
10th character is again an alphabet meant to verify the validity of the code
Use of PAN Card
Fees for PAN
The application fee is Rs 107/- for dispatch within India and Rs 989/- for outside the country. The PAN card will be issued within 15-20 days from the date of application.
Benefits of PAN Card
PAN card acts a proof of ‘date of birth’ while applying for Visa, bank loans, etc.
It also acts as a photo identity proof for the cardholder.
It helps the government in tracking various financial transactions.
Prescribed PAN application forms
- Indian citizens who wish to apply for a new PAN can apply for one by submitting a duly filled and signed Form 49A to any of the TIN-FCs managed by NSDL.
- Foreign citizens who wish to apply for a new PAN can apply for one by submitting a duly filled and signed Form 49AA to any of the TIN-FCs managed by NSDL. However, a Qualified Foreign Investor PAN applicant should submit Form 49AA to a Depository Participant after filling up the KYC details.
- In case of entities who have a PAN but do not have a PAN card and wish to get a PAN card, or wish to make changes to their existing PAN card may fill up the Change Request Application form
- Income department has started issuing online PAN those have Aadhaar card without any fees.
Request for New PAN Card or / and Changes or Correction in PAN Data Form
For know more about PAN click here https://www.mycorporation.in/