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Know Your PAN (Permanent Account Number)

Updated on April 1st, 2019 in PAN

The Permanent Account Number (PAN) card is a code that acts as identification for individuals, families and corporates, especially those who pay Income Tax. It is a requirement for the completion of various verification processes in India.

 

 

 

1. PAN Card Significance

A Permanent Account Number (PAN) is a 10-digit alpha-numeric code which is to be applied or obtained by every Indian citizen to carry any financial transactions. For example: AAAAA1111A. The PAN of an individual is required for bank transactions, income transactions, professional fees, income tax transactions, etc. Every separate legal entity is required to get its own separate PAN. In case of partnership businesses, Hindu Undivided Family, Limited Liability Partnership, Company, Trust, etc. the business entity is required to get a PAN separate from its owners.

A PAN card is required mandatorily in the following situations:

  • For opening a new account with a banking company or cooperative bank under the Banking Regulation Act, 1949.
  • For applying for debit card or credit card to any banking company or cooperative bank under the Banking Regulation Act, 1949, or to any other institution or company.
  • For opening Demat account with a participant, depository, securities custodian, or any other registered person under the SEBI Act, 1992, Section 12 (1A).
  • Sale or purchase of a motor vehicle or vehicle, as defined in the Motor Vehicles Act, 1988 which requires registration by a registering authority under that Act, other than two wheeled vehicles.
  • For any payment made in cash to a hotel or restaurant against one-time bill(s) for an amount more than Rs. 50,000.
  • For purchase of any foreign currency or payment made for traveling to any foreign country in cash as one-time payment for an amount more than Rs. 50,000.
  • For any purchase related payment against mutual fund units for an amount more than Rs. 50,000.
  • For any payment of acquired debentures or bonds issued by a company or institution for an amount more than Rs. 50,000.
  • For payment of acquired bonds issued by the Reserve Bank of India for an amount more than Rs. 50,000.
  • For any deposit made with a banking company or cooperative bank operating under the Banking Regulation Act, 1949, or any post office deposits of cash, made in one day for an amount more than Rs. 50,000.
  • For any purchase of pay orders, bank drafts, or banker’s cheque from a banking company or cooperative bank operating under the Banking Regulation Act, 1949, made in one day for an amount more than Rs. 50,000.
  • For a time deposit made with: (i) a Post Office; (ii) a banking company or cooperative bank operating under the Banking Regulation Act, 1949; (iii) a Nidhi as referred in the Companies Act, 2013, Section 406;(iv) or an NBFC registered under the Reserve Bank of India Act, 1934, Section 45-IA accepting or holding deposits from public, for an amount more than Rs. 50,000 or aggregating to over Rs. 5 Lakh in one financial year.
  • For payment to a banking company or cooperative bank operating under the Banking Regulation Act, 1949, for one or more than one prepaid payment instruments as per the policy for issuing and operating prepaid payment instruments which the RBI has issued under the Payment and Settlement Systems Act, 2007. This payment may be in cash, bank draft, pay order, or banker’s cheque for an aggregate amount exceeding Rs. 50,000 during a financial year.
  • For any payment to an insurer as a life insurance premium as per the Insurance Act, 1938, for an amount exceeding Rs. 50,000 during a financial year.
  • For any sale or purchase contract of securities (except shares) as per the Securities Contracts (Regulation) Act, 1956, Section 2(h), for an amount more than Rs. 1 Lakh per transaction.
  • For any sale or purchase of shares belonging to a company unlisted in the recognized stock exchange, for an amount more than Rs. 1 Lakh per transaction.
  • For any purchase or sale of immovable property for an amount more than Rs. 10 Lakh or which is valued by the authority of stamp valuation as per Section 50C at an amount more than Rs. 10 Lakh.
  • Sale or purchase, by any person, of goods or services of any nature other than those specified above list, if any. Amount exceeding ` 2 lakh per transaction:

2. Documents Required to Apply for PAN

For an Indian citizen applying for a PAN, any one of the following documents is required for each category:

  • For Proof of Identity: A copy of applicant’s Voter ID, passport, driving license, Aadhaar card, bank statement, pensioner card (with photo on it), and two recent photographs (mandatory).
  • For Proof of Address: A copy of applicant’s utility bill, registrar issued marriage certificate, passport, driving license, government issued domicile certificate, passbook from the post office.
  • For Foreign Citizens: A copy of applicant’s passport, OCI Card, Indian origin card, applicable Visa, CIN attested by Indian Embassy or the Apostille, resident country’s bank account statement.

3. PAN Card Application

An individual can apply for PAN card online or offline.

3.1 Offline Application

Step 1 – Download and Print Form 49A for Indian applicants and Form 49AA for foreign applicants from here.

Step 2 – Fill in your area code and AO code. You can find your code here.

Step 3 – Enter applicant’s details including name, address, etc. in the form.

Step 4 – Paste applicant’s recent photos; two on the first page and one on the second page of the form.

Step 5 – Applicant should then proceed to sign the form

Step 6 – This form along with relevant documents and a Demand Draft or Cheque of Rs. 110 (Rs. 93 principal plus 18% GST) should be sent to any one of the Indian PAN centers.

3.2 Online Application

Step 1 – Go to the NSDL Website.

Step 2 – Fill in the applicant’s Aadhaar Number, which will auto-fill the applicant’s details

Step 3 – Fill relevant details and click ‘Submit’

Step 4 – On the payment gateway, pay the processing fee of Rs. 110 (Rs. 93 principal plus 18% GST).

Step 5 – You will be generated an acknowledgement slip with a 15-digit code. In case the mobile number is updated in Aadhaar then the PAN can be generated within a day by authenticating it through Aadhaar OTP.

Step 6 – This acknowledgement slip will have to be sent to this address:

Income Tax PAN Services Unit,

NSDL e-Governance Infrastructure Limited,

5th Floor, Manti Sterling, Plot No. 341, Survey no. 997/8,

Model Colony, Near Deep Bungalow Chowk,

Pune – 411016

Step 7 – Upon reaching this address, the application will be processed in 15 days and sent to the applicant’s residence.

4. Update PAN

To update any information online in the PAN Card, the following steps can be followed:

Step 1 – Go to the website.

Step 2 – Select online application option to ‘Change PAN Data’.

Step 3 – Edit or update the information you wish to change in the Form.

Step 4 – On the payment gateway, pay the processing fee of Rs. 110 (Rs. 93 principal plus 18% GST).

To update the PAN card details offline, you may download the Correction Form and fill in the relevant information. Then mail this form along with along with relevant documents and a Demand Draft or Cheque of Rs. 110 (Rs. 93 principal plus 18% GST) to any PAN Centre in India.

The same process is required to be followed as that of applying for a new PAN.

5. Surrender PAN

To surrender PAN online, the same form used for ‘PAN Correction’ should be filled by selecting the option ‘Changes or Correction in existing PAN Data/Reprint of PAN Card (No Changes in existing PAN Data)’. Submit the application along with scanned copies the relevant documents and pay the processing fee. The acknowledgement slip will then be generated and sent to Pune, and the PAN will be surrendered eventually.

To surrender the PAN Offline, the correction form should be printed and the relevant details must be filed. This form should then be submitted along with relevant documents and processing fee to the NSDL center near you.

6. Mandatory PAN

The following individuals who don’t have a PAN allotted to themselves are under Section 139A (1) required to apply to the Assessing Officer in the time prescribed for PAN allotment:

  • Every individual with his total income or the total income of that person with which he can be assessed under the Act, exceeded the basic exemption limit in the previous year;
  • Every individual pursuing a profession or business with total sales, turnover, or gross receipts more than or likely to be more than Rs. 5 Lakh in any previous year;
  • Every person, who is a resident apart from an individual, and enters into a financial transaction for an aggregate amount of Rs. 2.5 Lakh or more in one financial year;
  • Every person who is the managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of the person mentioned in (iii) above or any person competent to act on behalf of such person.
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