PAN Card for Income Tax

A PAN card is a 10 digit unique number that is assigned to every tax paying individual and entity in India. The PAN card was designed solely for the purpose of helping the government identify taxpayers and ensuring these entities paid the taxes due as per the tax slabs they fall under.

While many think a PAN card is only required at the time of filing your Income tax returns, which is usually once a year, there are a number of uses that the PAN card fulfils relating to income tax.

Reasons Why PAN Card is Essential for Income Tax

6 reasons why a PAN card is essential when it comes to tax are listed below.

PAN Card for Filing Income Tax Returns

A PAN card is a necessity to file your Income Tax returns, since the government uses the PAN card to identify an individual or entity from a taxation point of view. The PAN card number has to be quoted when filing Income Tax returns by individuals and entities, failing which the individual or entity’s Income Tax returns will not be acknowledged and the government will assume the said individual has not paid his/her taxes.

PAN Card to File Income Tax Refund

Individuals and entities who are eligible for Income tax refunds after the payment of their taxes will have to quote their PAN card number in their application form. The PAN has to be quoted as the government uses it as the only means of identification in taxation related activities. Failure to quote the PAN in such an application will result in the application not being processed and the individual/entity will not receive the refund.

PAN Number to Check Income Tax refund Status

After filing the Income Tax refund application, taxpayers can check the status of their refund on the government portal. This status can be checked only upon entering the PAN card number of the individual/entity.

PAN for Filing TDS Certificates

TDS (Tax Deducted at Source) is a tax collection method implemented by the government of India by which the tax amount is deducted at the time of disbursing the amount to the individual. Companies, traders or any entities that deduct TDS are required to furnish a TDS certificate stating the amount of tax that has been deducted. The TDS certificate has to also contain the PAN number of the payee in all documents such as TDS Returns, statement of perquisites and profits in lieu of salary.

PAN Number to log in to the Income Tax Website

Taxpayers who wish to log in to the Income Tax website for the purpose of e-filing their returns are required to enter their PAN numbers. As the Income tax Department is moving towards a paperless income tax return filing system, taxpayers will have to file their returns through the website, where registration requires their PAN numbers.

PAN Card to avoid being overtaxed

Individuals who submit their PAN card details at the time of filing their returns will avoid being over taxed, as the government will have a history of their transactions and accordingly calculate tax after considering deductions. For individuals and entities who do not quote their PAN numbers, however, the government will levy a flat 30% tax irrespective of the tax slab the individual or entity comes under. Thus, having a PAN card will help the individual avoid paying more than he/she is required to.

What happens if you have multiple PAN cards

As per the rules, having multiple PAN cards in your name is an offence. A penalty of Rs.10,000 will be levied under Section 272B of the Income Tax Act, if found to have multiple PAN.

In case, you have more than one PAN it is better to surrender it immediately.

FAQs On PAN Card for Income Tax

  • I have a PAN Card & Form 16. What else do I need to submit an income tax return?
  • Apart from having a PAN card and Form 16, documents which are required by individuals while submitting an Income tax return are as follows:

    • Bank statements/passbook for interest on savings account.
    • Interest income statement for fixed deposits.
    • TDS certificate.
    • Form 26AS
    • Section 80C investment documents.
    • Contribution to Provident Fund
    • Children’s school tuition fees
    • Life insurance premium payment
    • Stamp duty and registration charges
    • Principal repayment on your home loan
    • Equity linked savings scheme
    • Mutual funds investment


    News About PAN Card for Income Tax

    • Taxpayers need to perform certain tax-related tasks before March 31

      Given that financial year 2020-21 is ending soon, taxpayers need to complete certain tax-related tasks before March 31 in order to avoid penalties. The tasks which need to be completed are filing revised income tax return (ITR), filing advance tax, linking PAN with Aadhaar, and filing declarations under the Vivad Se Vishwas scheme.

      It needs to be mentioned here failure to link PAN with Aadhaar will result in the PAN becoming inoperative. When it comes to filing advance tax, the deadline to pay the fourth instalment of advance tax for the financial year 2020-21 is March 15 while under the Vivad Se Vishwas scheme declarations need to filed before March end as per the Central Board of Direct Taxes.

      6 March 2021

    • Income Tax dept enables banks to check ITR filing status of PAN holders

      A functionality for scheduled commercial banks to check status of IT returns by entities based on their Permanent Account Number (PAN) was launched by The Income Tax (IT) department on September 2. The department has already provided 'Verification of applicability u/s 194N' for lenders and post offices since July 1, 2020.

      A notification on August 31 stated the Central Board of Direct Taxes (CBDT) included "scheduled commercial banks" in the list of agencies with which tax authorities can share information.

      4 September 2020

    • Gujarat Records A Rise In Taxpayers For 2017-18

      Income tax officials of Gujarat have informed that the state added more than 9 lakh new taxpayers in 2017-18. The number saw a whopping rise of 15.75 percent as compared to the previous year. As many as 57.16 lakh Income Tax Returns (ITRs) were filed in the state for 2017-18 financial year. The Income Tax Department accounted the rise in the number of ITRs filed to demonetisation and implementation of GST carried out by the government. It needs to be mentioned that the increase recorded in the number of returns filed as compared to the preceding years was 14.75 percent in 2016-17 and 12.22 percent in 2015-16. The provisional net collection of Income Tax in Gujarat for the financial year of 2017-18 was Rs.46,800 crore which was 17.5 percent higher than the collection in the preceding financial year. In the state, Ahmedabad saw the highest number of ITRs filed while Surat saw a decline in the filing of IT returns.

      18 April 2018

    • With last few days to go, citizens rush to camp to file tax returns

      With the deadline to file taxes approaching quite fast, hundreds flocked to a camp that was being organized by the I-T department at Gayatri Vihar in Palace Grounds. On the first day, counters saw pensioners mainly, besides those who had issues regarding tax filing online or linking their PAN and Aadhaar cards.

      According to officials, there were a number of glitches being faced by individuals while trying to link PAN and Aadhaar despite providing correct details in both databases. And since they did not have access to the Aadhaar database, they were not able to help. The camp however, was a go-to place for the elderly.

      1 August 2017

    • Aadhaar a must for filing Income Tax Returns, obtaining new PAN

      The policy-making body belonging to the Income Tax Department has issued a statement which states that the Supreme Court has only provided a “partial relief” to individuals who do not possess an Aadhaar Card or an Aadhaar enrolment ID. The government has stated that an individual should ensure that their Aadhaar Card and Permanent Account Number (PAN) are linked. This will become mandatory for individuals who wish to file their IT Returns in the coming year ahead. The policy making body of the Income Tax Department, Central Board of Direct Taxes (CBDT), has stated that a three-point gist of the Supreme Court order shall be issued to clear any doubts that a taxpayer might have. The IT department has linked more than 1.16 crore PAN cards with Aadhaar numbers in India.

      15 June 2017

    • Many PAN Cards Procured Prior to GST Found to be Fake

      Investigations carried out before the implementation of the Goods and Service Tax (GST) have revealed faults with over one lakh PAN cards in the region. Commissioner of Commercial Taxes Mr. Mukesh Kumar Meshram has instructed all Zonal and allied officials to authenticate every PAN card issued.

      It is mandatory for traders to register themselves with the Commerce Department before they can open businesses in the region, a process which requires the use of PAN cards which either belongs to them or their partner. It has been found that PAN cards are often misused by traders for illegitimate tax gains.

      The Central Government has directed all States to implement GST, a move which is expected to bring all types of businesses under its purview. The Commerce Department is ensuring all businesses are registered with it before that happens. According to a statement released by the Commissioner of Commercial Taxes, 1,01,227 PAN cards have been found to be faulty or fraudulent.

      26 July 2016

    • Tax Defaulters PAN Information to be blocked

      The government is mulling blocking the PAN card details of tax defaulters in an effort to curb tax evasion. Tax evaders and defaulters will no longer be able to receive government subsidies such as LPG subsidy.

      This move has been made to arrest the flow of black money from the country to safe havens. According to reports, only 3% of the population pay their taxes.

      As per this initiative, the Income Tax department would receive a notification from the Credit Information Bureau once a tax defaulter uses his PAN card for any service. Authorities would also share the list of flagged individuals with offices that register property so as to prevent defaulters from purchasing immovable property.

      From 2016, PAN details have to be quoted for a wide number of transactions, from jewellery purchases above Rs. 2 lakh to cash transactions above Rs. 50,000. Purchase of immovable property above Rs. 10 lakh would also require PAN details.

      21 June 2016

    About Pan Card
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