1. What is PAN?
PAN stands for the Permanent Account Number with a 10-digit alphanumeric code. PAN is used for the unique identification process. It is the responsibility of the Income Tax department to provide this number to every taxpayer or the person who applies for it. A PAN is a necessary document to file income tax returns. It is essential to have a PAN card if you are dealing in financial transactions such as professional fees, receiving a salary, sale or purchase of assets, etc. We recommend you have a PAN card in case you do not have one.
2. Benefits of PAN
There are many benefits of a PAN card for individuals, companies, or businesses. We have mentioned some of the major benefits below-
- PAN cards can be used for selling and purchasing rooted assets like property and vehicles with a capital of more than Rs. lakh.
- A PAN card is asked by the bank as identification proof for opening a bank account.
- If any individual wants to claim a refund on TDS deducted (more than actual tax) then linking your PAN to your bank account can play a vital role.
- When filing your income tax returns, a PAN card is the most crucial document for taxpayers.
- When buying foreign currency above Rs. 50,000/- or more. Under the Foreign Exchange Management Act, a PAN is mandated because transactions involving foreign currency are categorized under capital.
- When an individual is thinking to invest in mutual funds, share market, or stocks then it's advised to have PAN already.
However, IF any individual wants to opt for any of the above-mentioned activities without PAN, can go with Form-60. But it's highly suggested to declare those activities with PAN.
3. Structure of the PAN number
The initial five along with the tenth characters are alphabetical and the rest four are numeric. Three out of those five alphabetical characters are from AAA to ZZZ. Characters between 5th to 9th are 0001 to 9999. The fourth Character is an indication of the status of the PAN cardholder for instance-
- “P” stands for Individual
- “T” stands for Trust
- “C” stands for Company
- “G” stands for Government Agency
- “H” stands for Hindu Undivided Family
- “A” stands for Association of person
- “B” stands for Body of Individuals
- “J” stands for Artificial Juridical Person
- “L” stands for Local Authority
- “E” stands for Limited Liability Partnership
- “F” stands for Alliance Firm.
The 5th character shows the last name of the PAN holder. PAN Card is a unique document because of the structure of the numbers and alphabetic characters. This unique PAN number is structured automatically.
4. Required Documents for PAN
Applying for the PAN Card has been an easy and convenient process with time. This can be done online in simple steps. You just need to carry essential and valid documents for PAN. We have mentioned below the list of important documents.
- Address Proof Valid address proofs such as Aadhaar Card, Voters ID Card, Passport copy, Driving license, and ration card should be carried while applying for the PAN card online.
- Date of birth certificate Valid certificate of date of birth including Aadhaar Card, Voters ID Card, Passport copy, Driving license, pension payment order, ID Cards issued by central or state government bodies, domicile certificate issued by the government, or birth certificate from municipal authority.
- Photo ID Proof Valid address proofs such as Aadhaar Card, Voters ID Card, Passport copy, Driving license, and ration card should be carried while applying for the PAN card online.
5. Online process of PAN card application
An applicant can apply online via the website of NSDL or UTITSL portals easily. The payment can be made through the credit card/debit card, demand drafter net-banking. If you are a resident of India then the charges are Rs. 107 with service tax but in the case of being a Non-resident of India, an individual has to pay Rs. 994. After completing the online process, individuals need to send valid documents to NSDL and UTITSl by the courier service. When you get the receipt of your documents, Your application will be processed ahead and In a few days, Your PAN will be delivered to the mentioned address in the application.
6. What is eligibility for a PAN Card?
If you are one of the perplexed individuals who don't know the eligibility criteria of PAN, then don't worry about it more. We have explained this below and the eligibility of a PAN Card under section 139A of the income tax act.
- A company proprietor who is having more than Rs.5 lakh annual turnover.
- Every Hindu Undivided Family (HUF), where the family head is the signatory.
- Any corporation, whether a sole proprietorship, LLP, AOP/BOI, etc.
- Any charitable association, trust, or association.
All Hindu Undivided Families (HUF) and individuals are eligible for PAN with a total annual income exceeding the limit for non-taxable income. Apart from this, any minor also can apply for PAN if he/she is a future taxpayer. All citizens of India and NRIs can apply for it, there are no restrictions to application.
7. How to apply for PAN?
Applying online for PAN is an easy and convenient process. It can be done in several steps, we have explained it well below-
- Firstly, applicants have to visit the website of NSDL (https://nsdl.co.in/) and UTIITSL (https://www.utiitsl.com/). Click on “Apply”.
- Secondly, You have to choose the application type and make a selection of forms between Form-49 and Form-49AA from the given list.
- After You have to select the category that matches your identity.
- Fill out the remaining fields with valid details, enter the security code and submit the application.
- Next, there will be an option “Continue with the PAN application Form” click on it. Now, the applicant will be redirected to the page of the selected type of application form. Fill out this form with valid details.
- In the next step, You have to upload copies of all the necessary documents and click on submit.
- Now applicant has to make the required payment of PAN and download the receipt and continue. After doing this, Do authentication of your aadhaar number and a one-time password will be sent to your registered mobile
number. Lastly, Put in that one-time password and your application will be completed now.
After completing all the processes, You will get a declaration slip that might ask password, don't be panicked because your date of birth will be the password in DD/MM/YY format.
8. How can I check the status of my PAN application?
- Firstly, Applicant has to visit the website of NSDL (https://nsdl.co.in/).
- Applicants will see a Tab with “track PAN status”, click on that tab.
- Choose the type “application type”
- Now, an applicant has to put the ‘declaration number’ in the given box.
- After doing this, enter the provided captcha code and hit the submit button and it is done.
9. How to link PAN number with Bank account?
Any individual’s bank account details furnish your financial transactions and this is where the Income Tax Department deducts taxes from as well. Hence, linking a PAN card to your bank account is a way to link a PAN card to income tax. This can be done in a few steps.
- First, You have to login into your net-banking account with your ID and password.
- Next, you will get to see options identical to PAN registration, or Service requests,
- select one appropriate option. Now You need to select an option to link or update your PAN details as per your preferences.
- At the last, enter your PAN number and all required details carefully and submit, It's done here.
After completing this process, It will take 2 to 7 working days for the successful linking of PAN with the bank account.
Frequently Asked Questions
How can I check my PAN card status online?
Firstly, Applicant has to visit the website of NSDL (https://nsdl.co.in/). Applicants will see a Tab with “track PAN status”, click on that tab. Choose the type “application type”. Now, an applicant has to put the ‘declaration number’ in the given box. After doing this, enter the provided captcha code and hit the submit button and it is done.
What is the cost to apply for a PAN card?
If you are a resident of India then the charges are Rs. 107 with service tax but in the case of being a Non-resident of India, an individual has to pay Rs. 994.
Can I get a physical copy of the e-PAN card?
To get the physical e-PAN card, one must apply to the NSDL website or UTIITSL portal. After the process, a PAN card hard copy will be delivered to the address mentioned in Form 49A within 45 days.
What documents are required for a PAN card?
This can be done online in simple steps. You just need to carry essential and valid documents for PAN. Valid address proofs such as Aadhaar Card, Voter ID Card, and Passport copy. A valid certificate of date of birth including an Aadhaar Card, a Voters ID Card and a Photo ID Proof.
What does the 4th letter mean on the PAN card?
The fourth Character is an indication of the status of the PAN cardholder.
Why PAN card is required?
A PAN is a necessary document to file income tax returns. It is essential to have a PAN card if you are dealing in financial transactions such as professional fees, receiving a salary, selling or purchase of assets, etc. We recommend you have a PAN card in case you do not have one.
Can I get a PAN card before 18?
Yes. PAN card can be obtained now before turning 18. However, a child also can have PAN with the involvement of parents.
Can I have two PAN cards?
No. You can not have two PAN cards. The income tax department did not permit anyone to have more than one PAN but still, If you have two then you should give them back.
Is sharing PAN card details safe?
No. Sharing your PAN details can be detrimental to you. Even You should not share your PAN card number with anyone. Some people can use it for the wrong purpose.
How to update/edit information on PAN?
Firstly, applicants have to visit the website of NSDL (https://nsdl.co.in/) and UTIITSL (https://www.utiitsl.com/). Secondly, You have to choose the application type and click on “Changes or correction in the existing PAN card”. Thirdly, fill out the correction form of PAN with the proper details. fourthly, you need to submit all the necessary documents and pay the required fee. Now you will be issued a new declaration slip. Take a print of that slip and upload it on the NSDL’s income tax PAn service.