Permanent Account Number (PAN)
Overview : PAN is a crucial document that serves as a proof of identity and is also quite a significant document for taxpayers in India. It is a combination of a 10-digit alphanumeric number which is issued in the format of a hard laminated card, by the Income Tax Department. The blog discusses the Forms Prescribed for PAN Card Application, and what is the purpose of having a PAN!
Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the format of a laminated card, by the Income Tax Department. Pan Card/Number may be obtained by applying in the prescribed form 49 A. In this blog, we have tried to answer a number of questions that applicants usually seek while applying for their PAN cards or seeking related services like linking PAN to Aadhar.
Forms Prescribed for PAN Card Application
The process of obtaining a PAN card is purely application-based. So, you need to know what are the forms prescribed by the Government to apply for PAN, both by Indian citizens and foreign citizens. Also, you will have to file a separate application in case you need to modify any incorrect details mentioned in your PAN card. You can refer to the table below for complete information on this.
| S.No. | Purpose of Form | Form Number | Prescribed Govt Fee |
|---|---|---|---|
| 1. | New Pan Card Application for Indians | 49AA | Rs.107/- |
| 2. | Permanent Account Number (PAN) for Foreigners | 49A | Rs.989/- |
| 3. | Change in Pan Card | 49AE | Rs.107/- |
Purpose of Having a Permanent Account Number (PAN)
A PAN card can be used for several purposes, especially those related to tax payments and compliances, claiming tax deductions, exemptions, and refunds, setting up a startup business, seeking loans from banks and other financial institutions, as so on. We have elaborated deeply on all these purposes below:
- Proof of Identity: You might have observed that most of the applications you fill seek a proof of your identity, and PAN card is one of the documents which qualify and can be submitted as proof of identity of the applicant. The details mentioned in the PAN are used to verify the identity details filled by the applicant in such applications.
- ITR Filing: Filing Income Tax Returns is one of the mandatory compliances to be fulfilled by the tax assessee on or before the prescribed due date. However, to file Income Tax Returns, the assessee must be in possession of his PAN card, as the Department will verify the details of the assessee mentioned in the ITR with the details mentioned in his PAN card. Also, for this purpose, the assessee’s PAN card must be linked to his bank account.
- Tax Deductions: Various provisions of the Income tax Act allow deductions and exemptions for tax assessees, provided they furnish their PAN details. For instance, the rate of TDS deduction reduces if you have a PAN, and employees who pay rent exceeding Rs.₹1,00,000 per annum can claim deductions, if they submit their PAN details as per the new HRA law.
- Claiming Tax Refunds: The forms you need to file in order to claim income tax refunds applicable to you, must be accompanied by your PAN details.
- Opening a startup business: Not only individuals, but non-individual entities like corporations can also have a Permanent Account Number or PAN. In fact, every startup incorporated in India, be it in any form of business structure, must have a PAN before beginning its business operations.
- The corporate uses its PAN card for all purposes as that of an individual, viz, as a proof of identity, for tax payments and tax compliances, for opening bank accounts, to apply for loans, and for such other purposes.
- Opening a Bank Account: PAN card must be linked with your bank account for the Income Tax Department to keep a track of your income and consistently verifying the details of your bank transactions with your ITR filings.
- Obtaining loans: PAN is required for obtaining any kind of loan by individuals and non-individuals alike, be it from public sector banks, private sector banks, or any other financial institution.
Conclusion
With our detailed overview of online application for PAN or Permanent Account Number, you have hopefully got a distinct clarity on the subject by now. However, if you still have any further doubts and queries, or are seeking any clarification or additional information on the subject, feel free to ask us in the comments, or contact our startup advisors directly for expert guidance and assistance.
FAQ’s
Applications filed between 1st April 2022 and 30th June 2023 will have to pay Rs.500, whereas applications filed from the 1st of July 2022 onwards will have to pay Rs.1,000. You can link your PAN with Aadhaar in 2 simple steps. The first step is to pay the late fees applicable, either via the income tax e-filing portal or via the NSDL website.
Once you have paid the prescribed fees, within 4-5 working days, visit the income tax e-filing portal again and under the left panel “Quick Links”, click on “Link Aadhaar”. Enter your PAN number and Aadhaar number. Your Aadhaar details will appear on the screen. Check and validate them. An OTP will be sent to your registered mobile number. Once you furnish the OTP correctly, your application will be submitted. After processing, your PAN will be linked with Aadhaar.
Within 15 days from the date of acknowledgement, send it to the Income Tax Department with supporting documents like ID proof and residence proof. After processing, your e-PAN card will be sent to your registered e-mail ID.
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