Permanent account number

Permanent Account Number (PAN) is a code that acts as identification of Indians, especially those who pay Income Tax. It is a unique, 10-character alpha-numeric identifier, issued to all judicial entities identifiable under the Indian Income Tax Act 1961. An example number would be in the form of AAAPL1234C. It is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and it also serves as an important proof of identification.[1]

Like the Aadhaar Number and Driving License, it is also issued to foreign nationals (such as investors) subject to a valid visa and hence, it is not acceptable as a proof of Indian citizenship.

The PAN is mandatory for a majority of financial transactions such as opening a bank account, receiving taxable salary or professional fees, sale or purchase of assets above specified limits etc.; especially high-value transactions.

The primary purpose of the PAN is to bring a universal identification to all financial transactions and to prevent tax evasion by keeping track of monetary transactions, especially those of high-net-worth individuals who can impact the economy.

The PAN is unique to each individual and is valid for the life time of the holder, throughout India. An important point to note would be that once issued, the PAN is not affected by a change of address.

Structure and provisions

A — Association of Persons (AOP)
B — Body of Individuals (BOI)
C — Company
F — Firm
G — Government
H — HUF (Hindu Undivided Family)
L — Local Authority
J — Artificial Juridical Person
P — Individual
T — AOP (Trust)
K — Krish (Trust krish)

Nowadays, the DOI (date of issue) of the PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card if issued by NSDL and will not be mentioned if issued by UTI-TSL.

The central government has introduced a new online service called "Know Your PAN"[2] to verify or validate new and existing PAN numbers.[3]

Failure to comply with the provisions of Section 139A of Income Tax Act, penalty of Rs. 10,000/- for each default is payable u/s.272B by Assessing Officer.[4]

Physical appearance of PAN Card

The modern day PAN takes the shape of a standard plastic bank card. It bears a facial picture of the holder, the date of birth, the date of issue and a hologram sticker, which acts as an additional security feature. The card does not bear the address of the holder. However, the letter accompanying the PAN upon issue bears the address of the holder. Thus, the PAN card along with the letter may be accepted as an address proof by a service provider like a bank, RTO.

PAN cards for minors, issued through UTI-ITSL, do not bear a photo or the date of issue.

PAN cards issued prior to 2001 were black and white and were printed on a laminated plain paper with a poor quality photograph. Though these cards are still valid, holders of such cards can apply for a new plastic variant, bearing the same PAN, upon the payment of fees.[1]

Use of PAN

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, a new landline telephone connection / a mobile phone SIM card, purchase of foreign currency, bank deposits above Rs. 50,000/=, purchase and sale of immovable properties, vehicles etc.[5]

[6]

Obtaining PAN

Obtaining PAN is optional and voluntary like passport, driving license, Aadhaar etc. However, its use is mandatory at required places, like PAN for high-value financial transactions, Driving License for motor driving, passport for foreign travel etc..

One can apply for PAN by submitting the prescribed PAN application to the authorized PAN agency of the district or through online submission to NSDL along with 2 recent passport size color photographs, proof of ID, Address and Date of Birth and fee. In case of Re-print (re-issue), a photocopy of the old PAN is also required. Quoting Aadhaar Number attached with Aadhaar card is optional presently. However, it is recommended to provide Aadhaar letter now, if one has it, so that PAN gets linked to Aadhaar. It will save future effort of Aadhaar linking when it becomes mandatory. It takes about 10–15 days to receive the card and the card is sent by courier / registered India Post.[7]

Prescribed PAN application forms

There are two types of PAN applications:

  1. Application for allotment of PAN: - This application form should be used when the applicant has never applied for a PAN or does not have PAN allotted to him. Applicant may visit ITD’s website www.incometaxindia.gov.in to find whether a PAN has been allotted to him or not.

    Following forms have been notified by ITD for submitting applications for allotment of new PAN:
    FORM 49A: - To be filled by Indian citizens including those who are located outside India.[8]
    FORM 49AA: - To be filled by foreign citizens.[9]
  2. Application for new PAN Card or/and Changes or Corrections in PAN Data: - Those who have already obtained the PAN and wish to obtain the new PAN card or want to make some changes / corrections in their PAN data, are required to submit their applications in the following form prescribed by ITD:

    'REQUEST FOR NEW PAN CARD OR/AND CHANGES OR CORRECTION IN PAN DATA’:[10] - The same form can be used by Indian as well as foreign citizens.A new PAN card bearing the same PAN but updated information is issued to applicant in such case.

Supporting Documents prescribed for PAN (Rule 114 of Income Tax Rules 1962)

List of documents that are required to be furnished as Proof of Identity/ Address/ Date of Birth has been prescribed under Rule 114(4) of Income Tax Tax Rules 1962. Please visit ITD website [11]

Operating model

The issuance of PAN, verification, delivery and maintenance works on public private partnership (PPP) model like passport seva kendra (PSK) for reasons of economy, efficiency and effectiveness. The reputed entities like NSDL e-Governance Infrastructure Limited (formerly National Securities Depository Limited) [12] and UTI Infrastructure Technology Services Limited (UTIITSL) has been entrusted by Income Tax Department as managed service providers for processing of applications, collecting, handling and verifying personal documents like proof of ID, age and address, clarification with the applicants, printing the card and the letter and then mailing it. The processing agencies obtain the new PAN number online from the server of the income tax department after successful processing of the application documents. Some critiques in India may call the handling, processing and delivery of personal ID and financial documents by private contractors as violation of privacy, however it is not so.[13][14][15][16]

One should avail services from the authorised PAN Centres established by NSDL e-Governance and UTIITSL which have been entrusted by the Income Tax Department.

NSDL e-Gov centres can be located at TIN website [17]

UTIITSL centres can be located at its website [18]

Online application facility for obtaining PAN

For the net savvy users, it is very easy to make application online at the websites of NSDL e-Governance or UTIITSL. Brief process note as available on NSDL e-Gov's TIN website is really useful. The online application in brief is as under:

  1. Go to the websites of NSDL e-Gov[19] or UTIITSL [20] and submit application details online (No other entity is authorized by ITD to provide online PAN application facility)
  2. Submit application details online
  3. make online payment of application fee.
  4. On successful submission and acknowledgement receipt is generated. Save and print the receipt, affix recent photographs over it and sign it in the space provided on the receipt.
  5. Forward same to NSDL e-Gov or UTIITSL (as applicable) along with supporting documents (POI, POA, Date of Birth documents) for further processing.
  6. Status of your application then can be traced online.

PAN for Foreign Citizens

PAN is an important document for foreign citizens also, who wish to undertake business in India or wish to invest in India. Procedure to obtain PAN is same as applicable for Indian citizens. However, the application is required to be filled using Form 49AA meant for foreign citizens and submitted at any of the authorized PAN Service Centre through the authorized representative in India. List of documents applicable for foreign citizens are given below:

Individuals and HUF

Documents accepted as Proof of Identity

  1. Copy of passport, or
  2. Copy of Person of Indian Origin (PIO) card issued by Government of India, or
  3. Copy of Overseas Citizen of India (OCI) card issued by Government of India, Or
  4. Copy of other national or citizenship Identification Number or Taxpayer Identification Number duly attested by “Apostille” (in respect of countries which are signatories to the Hague Convention of 1961) or by the Indian Embassy or High Commission or Consulate in the country where the applicant is located or authorised officials of overseas branches of Scheduled Banks registered in India (in prescribed format) .

Documents accepted as Proof of Address

  1. Proof of Identity documents mentioned above bearing address of the applicant or
  2. Copy of Bank account statement in the country of residence, or
  3. Copy of Non-resident External (NRE) bank account statement in India, or
  4. Copy of Certificate of Residence in India or Residential permit issued by the State Police Authorities, or
  5. Copy of Registration certificate issued by the Foreigner's Registration Office showing Indian address, or
  6. Copy of Visa granted & Copy of appointment letter or contract from Indian Company & Certificate (in original) of Indian address issued by the employer.

For other than Individuals and HUF (Including those having no office of their own in India)

Documents accepted as Proof of Identity & Proof of Address

  1. Copy of Certificate of Registration issued in the country where the applicant is located, duly attested by “Apostille” (in respect of the countries which are signatories to the Hague Convention of 1961) or by the Indian Embassy or High Commission or Consulate in the country where the applicant is located or authorised officials of overseas branches of Scheduled Banks registered in India (in prescribed format) ; or
  2. Copy of registration certificate issued in India or of approval granted to set up office in India by Indian Authorities.

At present, PAN Service Centres are located in India only. However, foreign citizens may find online mode of application more convenient and easy. The online facility allows payment of fees using credit card option for foreign citizens. Also, the fees charges is reasonable; i.e. Rs. 107 if the PAN card is to be received in India and Rs. 989 if the PAN Card is to be received at a foreign location.

Concerns with PAN Cards

Although there are only 30 million (3 crore) income tax payers in India, yet there are 170 million genuine PANs issued as of 2014.[21] While the alphanumeric PAN number is unique, individuals and corporate entities have been able to obtain multiple PAN cards fraudulently. It is illegal to obtain multiple PANs and there is a penalty of Rs.10,000/= when caught. In addition, there are fake PAN cards due to ubiquitous plastic card printers.[22][23][24][25][26] Additionally, illegal immigrants have also got PAN cards issued to them; most have used the services of PAN card agents.[27][28][29][30][31][32][33]

One should take due care to refrain from using services of tout agents who claim to provide hand delivery of PAN cards and charge extra. Also, there are certain sites that have proliferated on the web that provide online PAN service at additional charge. However, there are only two authorised entities who are also authorised to host online PAN application services on behalf of ITD, i.e. NSDL e-Governance & UTIITSL.

See also

References

  1. 1 2 TIN
  2. ↑ "Know Your PAN".
  3. ↑ this website
  4. ↑
  5. ↑ UTIITSL India: Financial & IT Service Provider, PAN Card Issuer
  6. ↑
  7. ↑ PAN Card Application
  8. ↑ https://www.tin-nsdl.com/download/pan/Form49A_16042015.pdf
  9. ↑ https://www.tin-nsdl.com/download/pan/Form49AA_12082014.PDF
  10. ↑ https://www.tin-nsdl.com/download/pan/PANCRForm_16042015.pdf
  11. ↑
  12. ↑ https://egov-nsdl.co.in/
  13. ↑ PAN Card Application
  14. ↑ UTIITSL India : Financial & IT Service Provider, PAN Card Issuer
  15. ↑ Become PAN Card Agent
  16. ↑ Passport Seva : About Us | Passport Seva
  17. ↑ https://www.tin-nsdl.com/pan.php
  18. ↑ http://www.myutitsl.co.in//intra/web/search_psa.jsp
  19. ↑ https://www.tin-nsdl.com
  20. ↑ http://www.utiitsl.com
  21. ↑ I-T dept may make d-o-b proof mandatory for PAN card - Economic Times
  22. ↑ "Crooks fake credit history, dupe banks in Kolkata". Times of India. 2012-10-19. Retrieved 2014-03-26.
  23. ↑ "Rs 1 crore e-fraud: Fake PAN cards used to open several bank accounts". Times of India. 2013-02-10. Retrieved 2014-03-26.
  24. ↑ Tax evaders seen holding multiple PAN cards. Business Today. (24 March 2011).
  25. ↑ New PAN card to cost Rs 105; aims to weed out fake PAN card issue. The Economic Times. (28 January 2014).
  26. ↑ Income-Tax Department detects and destroys 11.69 lakh multiple PAN cards. Moneylife.
  27. ↑ Pak infiltrators arming themselves with PAN cards - The Times of India
  28. ↑ Illegal Bangladeshis PAN out in India to cement their Aadhar
  29. ↑ 198 Bangladeshis held, 164 deported | The Asian Age
  30. ↑ Bombay High Court :- A Birth Certificate, Passport Or Even An Aadhaar Card May Not Be Enough To Prove That You Are An Indian Citizen | Indialegalaid
  31. ↑ Passport alone no proof of citizenship: Bombay HC - The Times of India
  32. ↑ Bangla infiltrator gets Indian passport - Indian Express
  33. ↑ Passport, birth proof not enough to claim Indian citizenship: HC
  34. ↑ https://www.npscra.nsdl.co.in/all-citizens-of-india.php

Apply online for PAN (Form 49A for Indian citizens) https://tin.tin.nsdl.com/pan/form49A.html

Apply online for PAN (Form 49A for foreign citizens) https://tin.tin.nsdl.com/pan/form49AA.html

Brief guidelines on online PAN application https://www.tin-nsdl.com/download/home/Online-PAN-Application-Final-Brief-process.pdf

External links

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