WHAT IS PAN ?
Permanent Account Number or PAN is a means of identifying different taxpayers within the country. PAN is a special alphanumeric 10-digit identification number (which includes both alphabets and numbers) assigned to Indians, mainly those who pay tax.
The PAN identification system is a computer-based system which assigns a unique identification number to every tax paying entity in India. Through this process, all of a person's tax-related information is registered against a single PAN number which acts as the primary key for information storage. This is shared around the world and therefore no two individuals can have the same PAN on tax paying entities.
When PAN is allotted to an entity, the Income Tax Department gives PAN Card as well. Although PAN is a number, PAN Card is a physical card with your PAN as well as your name, birth date (Date of birth) and photo. Copies of this card can be submitted as identification evidence or as D.O.B evidence.
Your PAN Card is valid for life as it is uninfluenced by any change of address.
IMPORTANCE OF PAN
A PAN Card is important for taxpayers, as it is required for all financial transactions and is used to monitor your money's inflow and outflow. It is critical when it comes to paying income tax, receiving tax refunds and receiving income tax department communication.
The 2019 Indian Budget proposed that individuals who do not have a PAN may use their Aadhaar number to file returns and for any other use for which PAN was currently mandatory. This means that if you haven't yet connected your PAN to Aadhaar, or have no PAN but an Aadhaar, you don't have to either connect PAN and Aadhaar, or apply for a new PAN.
However , the rules about this are still in the process of creation / updation/approval.This being said, a large number of monetary transactions continue to involve PAN. Even, PAN Card serves as proof of identity.
USES OF PAN
- Since PAN Card contains details such as name, age and photograph, it can be used as valid proof of identity across the world.
- PAN is the perfect way to keep an eye on your tax payment. Otherwise, you might be required to pay it multiple times since your tax payment cannot be verified.
- Since PAN is unique to each person, its misuse is virtually impossible for tax evasion or other devious means.
- Utility connections such as electricity, telephone, LPG, and internet can be used with PAN Card.
ELIGIBILITY OF PAN CARD
The following taxpaying entities are allowed under section 139A of the Income Tax Act to have a Permanent Account Number:
- Any individual who is liable to pay tax or has paid tax to the Income Tax Department. That will be calculated on the basis of the tax slabs.
- Any person who performs a business or professional practice earning him or her an annual turnover of more than Rs.5 lakh in any assessment year.
- Importers and exporters who are liable to pay some form of tax or duty charges in compliance with the Income Tax Act or other prevailing law .
- All forms of trusts, charities, and associations
- All taxpayers - children, families, HUFs, associations, companies, families, trusts, and others - can apply for PAN.
What if you do not have a PAN card?
If your income falls within the taxable bracket, failure to have a PAN card will result in:
- Flat 30 per cent tax on your income and property, as stipulated by India's Income Tax Department. This rule applies to taxable individuals, businesses and all entities including foreign nationals and companies registered outside India.
- Not being able to purchase a motor car, purchase immovable property worth more than Rs. 10 lakh, or open a bank account, among others.
- Unable companies to carry out a huge chunk of their financial and procurement operations.
- Please note that when Aadhaar and PAN are interchangeable, those rules can change.
Who Issues a PAN Card ?
The PAN Card is issued by the Department of Income Tax with the authorised PAN agencies at the district level and NSDL (National Securities Depository Limited). Throughout the country, there are many TIN-facilitation centers and PAN centers run by NSDL that help people get their PAN Card.
The PAN issuance process operates on the PPP (Public Private Partnership) model. This is done to keep the management, production, and issuance of PAN applications economical, secure, and reliable.
FAQs on PAN
No, applying for a PAN Card can not be achieved with a handwritten letter. The application shall only be approved in the format of Direct Tax notified by the Central Board. The forms pertaining to the same are: Form 49A For Indian People, Form 49AA for foreign citizens
PAN Card application form should be filled out legibly in English. To update info, use the capital letters and black ink (preferably). Until filling out the form make sure you read all the instructions carefully.
Yes, you can affix 2 recent color images with white background in the form if you are an individual applicant. The pictures will be 3.5 cm x 2.5 cm wide. The photos should not be clipped into the form or stapled. The applicant is required to sign through the photo so that a part of the sign is on the photo and the rest is on the form.The clarity of the image on the PAN Card will depend on the photographer's clarity and quality that you affix to the application form.
All female applicants, irrespective of their marital status, should include only their father's name in the PAN application form. No need to update the form with the husband's name.
No, the form is available at no charge.
If your address is within India, the processing fee for the PAN Card will be Rs.110, i.e. Rs.93 (application fee) + 18 percent GST.
If your address is outside India the processing charge for your PAN Card is Rs.1,020,That is to say, Rs.93 (application fee) + Rs.771 (dispatch fee) + 18 percent GST.
- All applicants are mandated to provide their email ID or telephone number in the PAN application form, so that they can be contacted in case of a discrepancy. This is also helpful when sending an email to the applicant to collect the PAN.
- If the applicant's landline number is given, reference should be provided to country code and STD code. If the mobile number is given, it should state the country code.
- If the applicant's email ID is furnished, the PAN will be sent through email to him / her.
In such a case, the applicant's left hand thumb impression may be given in the PAN application form at the place meant for signature. A Notary Public, a Gazetted officer, or a Magistrate with an official stamp and seal may further agree to this.
Yeah, you'll get an acknowledgement including a specific 15-digit number.
You can reach Taxxinn for changing photo on a PAN card.