Permanent Account Number or PAN is a means of identifying various taxpayers in the country. PAN is a 10-digit unique identification alphanumeric number (containing both alphabets and numbers) assigned to Indians, mostly to those who pay tax.
The PAN system of identification is a computer-based system that assigns unique identification number to every Indian tax paying entity. Through this method, all tax-related information for a person is recorded against a single PAN number which acts as the primary key for storage of information. This is shared across the country and hence no two people on tax paying entities can have the same PAN.
When PAN is allotted to an entity, PAN Card too is given by the Income Tax Department. While PAN is a number, PAN Card is a physical card that has your PAN as well as name, date of birth (DoB), and photograph. Copies of this card can be submitted as proof of identity or DoB.
Your PAN Card is valid for lifetime because it is unaffected by any change in address.
More About PAN
- How to Apply for PAN Card
- PAN Card Application Do's and Don'ts
- Uses and Benefits of Having PAN Card
- PAN Card Eligibility
- Tracking PAN Transactions
- What Happens If You Don't Have PAN Card
- New Design of PAN Cards
- Who Issues PAN Card?
- What the Alphabets and Numbers on PAN Card Mean
- Types of PAN Cards
- History of PAN in India
- Concepts Similar to PAN
How to Apply for PAN Card
PAN Card applicationcan be made online on one of the following websites:
You can also apply offline at any of the district-level PAN agencies. You can apply for a new PAN as well as make correction or change information yourself. You can even request for a duplicate PAN Card or reprint the card if you lose the original.
For new PAN, Indian citizens and NRIs (including companies, NGOs, partnership firms, local bodies, trusts, etc.) need to fill Form 49A. Foreigners and foreign entities need to use Form 49AA. These forms, along with all the required documents for PAN, should be submitted to the Income Tax PAN Services Unit.
Once you apply for a new or duplicate PAN, or request for corrections/changes, you can track the status of PANapplication via the acknowledgement number provided.
As per the NSDL website, the entire process of printing and dispatching cards takes approximately 2 weeks or 14 days.
PAN Card Application Do's and Don'ts
- Fill in all the details as per the identity and address proof documents you are submitting.
- Get your thumb impression attested by a Magistrate/Notary before submitting the form, to avoid disqualification.
- Write the complete address and provide accurate contact details in the form.
- Fill in the application form in capital letters.
- Don't make corrections or over-write anywhere on the form.
- Do not use initials in the first name or last name columns.
- Do not apply for a new PAN card if your old PAN card is lost/stolen/defaced. Request for a duplicate PAN instead.
Why Is PAN Important? – Uses and Benefits of Having PAN Card
PAN Card is important for taxpayers as it is necessary for all financial transactions and is used to track the inflow and outflow of your money. It is important when paying income tax, receiving tax refunds, and receiving communication from the Income Tax Department.
The Indian Budget 2019 proposed that individuals who do not have a PAN can use their Aadhaar number to file returns and for any other purpose where PAN was earlier mandatory. This means that if you have not linked your PAN with Aadhaar yet, or do not have a PAN but have an Aadhaar, you don't have to either link PAN and Aadhaar, or apply for a new PAN. However, the rules about this are still in the process of creation/updation/approval.
That said, PAN continues to be necessary for a large number of monetary transactions. PAN Card also serves as a proof of identity. Given below are some of the uses and advantages of having a PAN.
Uses of PAN in Financial Transactions
- PAN needs to be quoted while paying direct taxes.
- Taxpayers need to input their PAN when paying income tax.
- While registering a business, PAN information needs to be furnished.
- A lot of financial transactions require PAN information. Some of these transactions are:
- Sale or purchase of property (immovable) which is valued at Rs.5 lakh or above
- Sale or purchase of a vehicle except a two-wheeler
- Payments made towards hotels and restaurants and which are above Rs.25,000
- Payments made in connection with travel requirements to other countries. The amount in this case if it exceeds Rs.25,000, then you need to quote your PAN
- Payments of more than Rs.50,000 towards bank deposits
- Purchase of bonds worth Rs.50,000 or more
- Purchase of shares worth Rs.50,000 or more
- Purchase of insurance policy worth Rs.50,000 or more
- Purchase of mutual fund schemes
- Payments made for more than Rs.5 lakh towards purchase of jewellery and bullion
- To remit money out of India
- Transfer of funds from NRE to NRO account
General Uses/Advantages of Having PAN
- Since PAN Card contains information such as Name, Age and photograph, it can be used throughout the country as a valid identity proof.
- PAN is the best possible way to keep track of your tax payment. Otherwise, you might be required to pay it multiples times since your tax payment cannot be verified.
- Since PAN is unique for every entity, its misuse is almost impossible for purposes of tax evasion or other devious means.
- PAN Card can be used to avail utility connections such as electricity, telephone, LPG, and internet.
Who Should Get PAN? – PAN Card Eligibility
Under section 139A of the Income Tax Act, the following taxpaying entities are required to have a Permanent Account Number:
- Any person who has paid tax or is liable to pay tax to the Income Tax Department. This will be decided based on the tax slabs.
- Any person who is carrying out a business or professional practice which earns him a yearly turnover of more than Rs.5 lakh in any year of assessment.
- Importers and exporters who are liable to pay any form of tax or duty charges as per the Income Tax Act or as per any prevalent law
- All kinds of trusts, charitable organisations, and associations.
All tax paying entities – minors, individuals, HUFs, partnerships, companies, body of individuals, trusts, and others – should apply for PAN.
Tracking PAN Transactions
The government recently unveiled a programme by which it can track transactions made through a PAN card for the purpose of calculating tax. Known as the Income Tax Business Application-Permanent Account Number or ITBAN-PAN, it will enable the Income Tax Department to track every transaction made where a particular PAN number was quoted.
- All financial transactions such as mergers, acquisitions, liquidation, and amalgamation of PAN as well as dissolution information where a particular PAN card was quoted can be traced through the software.
- All existing PAN information and the entire database of PAN information has also been moved to this software.
What Happens If You Don't Have PAN Card?
If your income falls in the taxable bracket, not having a PAN card would result in:
- Flat 30% tax on your earnings and wealth, as stipulated by the Income Tax Department of India. This rule applies to individuals, companies and all entities eligible for tax, including foreign nationals and firms registered outside India.
- Not being able to purchase a motor vehicle, buy immovable property worth over Rs. 10 lakh, or open a bank account, among other activities.
- Businesses unable to conduct a large chunk of their financial activities and procurement.
*Please note that these rules may change once Aadhaar and PAN become interchangeable.
New Design of PAN Cards
The Income Tax Department has prescribed a new format for PAN Cards issued after 1 January 2017. The changes made to the new PAN Card have been listed below:
- A Quick Response (QR) code has been printed onto the new PAN Card which will carry details of the card holder. This QR code can be used for verification of data.
- New sections for the name of the card holder, the card holder's father's name, and date of birth have been added.
- The location of the PAN and the signature of the card holder have been changed.
Who Issues PAN Card?
PAN Card is issued by the Income Tax Department with help from authorised district-level PAN agencies, UTI ITSL (UTI Infrastructure Technology and Services Limited), and NSDL (National Securities Depository Limited). There are several TIN-Facilitation Centres and PAN centres across the country, run by NSDL that help citizens get their PAN Card.
The process of issuing of PAN works on the PPP (Public Private Partnership) model. This is done to maintain economy, efficiency, and effectiveness of managing, processing, and issuing PAN applications.
How is PAN Allotted?
- Once you submit your PAN application with the filled-up form and supporting documents, the PAN Centre verifies it against the original documents.
- For online process, you need to submit the form online and then send self-attested photocopies of the documents to NSDL, Pune.
- Assessing Officers assess the application details. Your details will be cross-verified against the details of existing PAN Card holders in the central database.
- In case there is no record of a previous PAN allotted to you, then the request is accepted and processed. A PAN is allotted to you as per your taxpayer classification.
What Do the Alphabets and Numbers on Your PAN Mean?
Your Permanent Account Number is not a series of random numbers and letters. The structure of PAN is actually quite interesting. Here's what each component of PAN means:
- First Three Characters: These are a sequence of alphabets from AAA to ZZZ.
- Fourth Character: The fourth character signifies the type of taxpayer that you are.
- A - Association of Persons (AOP)
- B - Body of Individuals (BOI)
- C - Company
- F - Firm/Limited Liability Partnership
- G - Government Agency
- H - HUF (Hindu Undivided Family)
- L - Local Authority
- J - Artificial Judicial Person
- P - Individual
- T - Trust
- Fifth Character: The fifth character in PAN is the first letter of your surname. So, if a person is named 'Rajesh Khanna', the fifth character of his PAN will be 'K'.
- Sixth to Ninth Characters: This is from a sequence of numbers between 0001 and 9999.
- Last Characters: This is an alphabet check letter.
Types of PAN Cards
PAN cards are issued to different tax-paying entities. Based on that, the types of PAN are:
- PAN Card for Indian Individuals
- PAN Card for Indian Companies
- PAN for Foreign Citizens
- PAN for Foreign Companies
PAN Cards issued to individuals have the person's photograph, name, father's name, date of birth, signature, an authenticity hologram, QR Code, date of issue of the PAN, and the Permanent Account Number. PAN Cards issued to companies have the name of the company, its date of registration, the PAN number, hologram, QR Code, and date of issue of PAN. It will not have a photograph or signature.
History of PAN in India
Before the concept of PAN was introduced, there was a GIR number assigned to taxpayers. This was basically a manual system and was unique only within a ward or under a particular assessing officer. However, the number was not unique at the country level. Since GIR unique not unique, there could be higher chances of miscalculation and errors, or cases of mistaken identity during tax assessment.
The GIR number was allotted by the Assessing Officer to a tax payer and it included the Assessing Officer's information as well.
In the year 1972, the concept of PAN was rolled out by the Indian government and was made statutory under section 139A of the Income Tax Act, 1961. Initially a voluntary process, PAN was made mandatory for all tax paying individuals in 1976.
The initial PAN number allotments were made manually, and to avoid duplication, each ward/circle received a certain set of numbers. This series was abandoned in the year 1995.
Old PAN Series
In spite of these changes, the first avatar of the PAN card met with some difficulties, as mentioned below:
- There was no database to maintain records of the PAN number allotted, with very limited information being recorded.
- The data that was stored for PAN holders was neither structured well nor did it capture detailed information except a few primary details like name, address, etc.
- There was no centralised authority who issued the PAN cards, resulting in the possibility that different centres could allot the same number to different individuals in the country.
- The PAN number was not a permanent one as the number changed depending on the holder's address.
New PAN Series
In 1995, under an amended section 139A of the Income Tax Act, the new series of PAN was rolled out by the Income Tax Department. The new PAN series facilitated the following points which were earlier not included in the old series of PAN:
- Linking of all tax-related information, current as well as past, to a single identification number.
- Easy retrieval of information from the central database. With the launch of the new PAN series, the segregation and recording of data was done more effectively.
- Matching all financial information mapped against a single PAN, so that all loan details, credit and debit details as well as investment details could be tracked and thereby help prevent tax evasion.
Concepts Similar to PAN Card
The concept of PAN, or a unique number assigned to every tax paying entity, is not a new concept. In fact, there are a number of similar such utilities that are used for tax purposes.
TAN (Tax Deduction and Collection Account Number) - This is a unique 10-digit number that is issued to individuals and entities who have to collect or deduct tax on payments made as part of tax Deducted at Source (TDS) under the Income Tax Act. TAN has to be quoted when applying for TDS or Tax Collected at Source (TCS) challans made to disburse the refund as well as on certificates. Failure to quote the TAN would result in a fine of Rs. 10, 000.
TIN (Taxpayer Identification Number) - TIN number is a unique 11-digit number that is used to identify dealers who are registered under Value Added Tax. Allotted by individual states, it is compulsory for all manufacturers, traders and dealers to register for a TIN number. This number is to be quoted when generating invoices, orders or quotations by both the issuing as well as the receiving company. It is also used to identify assesses under the Income tax Act of 1961.
PAN Card FAQs
Where do I get the PAN application form?
The PAN application form is available at any NSDL TIN Facilitation Centre (TIN-FC) or PAN Centre. Certain stationery vendors also provide the form to applicants. Alternatively, you can download the form from the NSDL-TIN website: https://www.tin-nsdl.com/downloads/pan/downloads-pan.html
To procure a PAN Card, can I write an application on plain paper?
No, it is not possible to apply for PAN Card through a handwritten application. The application is only accepted in the format notified by the Central Board of Direct Taxes. The forms pertaining to the same are:
For Indian citizens, Form 49A
For foreign citizens, Form 49AA
How should I fill the PAN application form?
The application form for PAN Card should be filled legibly in English. You should use capital letters and black ink (preferably) to update details. Make sure that you read all instructions carefully before filling up the form.
Is it necessary to include father's name in the application form for a female who is married/widow/divorced?
All female applicants should include only their father's name in the PAN application form, irrespective of their marital status. The form does not need to be updated with the husband's name.
Is it necessary to furnish 2 photos for the application?
Yes, if you are an individual applicant, you should affix 2 recent colour photos with white background in the form. The size of the photos should be 3.5 cm x 2.5 cm. The photographs should not be clipped or stapled to the form. The applicant is required to sign across the photograph such that a part of the sign is on the photo and the rest is on the form. The image clarity on the PAN Card will depend on the clarity and quality of the photograph that you affix on the application form.
Should I mention my email ID or telephone number on the form?
It is mandated for all applicants to provide either their email ID or telephone number in the PAN application form, so that they can be contacted in the event of a discrepancy. It is also useful when the applicant receives the PAN through email.
If the landline number of the applicant is provided, the country code and STD code should be mentioned. If the mobile number is given, the country code should be stated.
If the email ID of the applicant is furnished, the PAN will be sent to him/her through email.
What is the application process for individuals who do not know how to sign?
In such a scenario, the left hand thumb impression of the applicant can be provided at the place meant for the signature in the PAN application form. This should further be attested by a Notary Public, a Gazetted officer, or a Magistrate with an official stamp and seal.
Are there any charges that I would have to pay for the PAN Card application form?
No, the form is available free of any charges.
When I submit Form 49A for PAN Card, what are the charges that I have to bear?
If your address is within India, then the PAN Card processing fee is Rs.110, i.e., Rs.93 (application fee) + 18% GST.
If your address is outside India, the PAN Card processing fee is Rs.1,020, i.e., Rs.93 (application fee) + Rs.771 (dispatch charges) + 18% GST.
Where should the PAN Card application form be submitted?
The PAN Card application form, once duly filled in and self-attested, can be submitted along with all relevant documents to any one of the PAN Centres or TIN-FCs that are managed by NSDL e-Gov.
If you have submitted a PAN Card application online, you should take a printout of the application form, sign it and affix a recent photograph. Then you should send this form along with supporting documentation to the address below:
Income Tax PAN Services Unit
(Managed by NSDL e-Governance Infrastructure Limited)
5th Floor, Mantri Sterling, Plot No. 341,
Survey No. 997/8, Model Colony,
Near Deep Bungalow Chowk,
Pune - 411 016
Will I get an acknowledgement when I submit my PAN application form at a TIN-FC?
Yes, you will receive an acknowledgement that contains a unique 15-digit number.
How can I change the photograph on my PAN Card?
If the photo on your PAN Card is unclear, then you can get the PAN Card replaced with a photograph of better quality and clarity. This facility is available as part of 'Correction of PAN Card' requests. This request is similar to that for name change and change in date of birth. You can visit the website, https://tin.tin.nsdl.com/pan/ and fill up the 'PAN card change request form'. The relevant documents should be sent to the address mentioned in the form.