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Permanent Account Number (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/-
Table of Content

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. 

FAQs

How to link PAN with Aadhaar?

Linking your PAN is mandatory with Aadhar. The last date for doing so has been extended from 31st March 2022 to 31st March 2023. However, the applications filed in the extended period will have to be accompanied by the prescribed late fees. 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 Aadhar 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 Aadhar”. The next step is to enter your PAN number and Aadhar number. Your Aadhar details will appear on the screen. Check and validate the same. After this, an OTP will be sent to your registered mobile number. Once you furnish the OTP correctly, your application will finally be submitted. After the department completes processing the application, your PAN will finally get linked with Aadhar.

How to download a PAN card?

You can download your e-PAN online from the TIN-NSDL (now Protean) or the UTIITSL application.

How to apply for a PAN card online?

To apply for a PAN card online, you can either visit the TIN-NSDL (Protean) or UTIITSL portals. Both these portals have facilities to fill the application online. Once you have filled the application online and submitted it with the prescribed application fees, an online acknowledgement receipt will be generated. Within 15 days from the date of issue of such acknowledgement receipt is generated, it needs to be sent to the Income Tax Department with supporting documents like the applicant’s ID Proof and residence Proof. After the process of documentation is completed, the ROC begins processing the application. Upon successful processing your e-PAN card will be sent to your registered e-mail ID.

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What are the benefits of Permanent Account Number (PAN)?

A PAN number has been made compulsory for every transaction with the Income Tax department. It is also mandatory for numerous other financial transactions such as the opening of bank accounts, availing institutional financial credits, purchase of high-end consumer items, foreign travel, a transaction of immovable properties, dealing in securities etc. A PAN card is a valuable means of photo identification accepted by all government and non-government institutions in the country.

I have lost my PAN card but remember my PAN number. Do I need to get a New card?

With your PAN you can continue to transact with the Income Tax department. However, in respect of other agencies, you may encounter constraints without a PAN card since it doubles as a photo identity card.

I have two PANs. Which one should I use?

You may retain any one of the numbers and surrender the other through a letter addressed to your jurisdictional Assessing Officer. Minimum capital of Rs. one lakh (it can be used for business whenever required and does not necessarily have to be kept in bank/company deposit all the time).

If I do not surrender the additional PAN, is there any problem?

Yes, it is illegal to have two PANs and the penalty for such offense is Rs.10,000/-.

I use two PANs for different purposes, one for my Demat Account & other for filing my Income Tax return. Is that right?

It is advisable to retain only one PAN, preferably the one used for Income Tax purpose and surrender the other number immediately. The institutions where the latter number has been quoted should be informed of the correct PAN.

Is it mandatory to file a return of income after getting PAN?

No, return is to be filed only if you have taxable income.

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.

About Setindiabiz

Setindiabiz is an organized team of experienced CA, CS, & Lawyers, duly supported by a pool of trained accountants & paralegal staff that provides quality & affordable compliance services to startups & small businesses in India. The views, statements and recommendations expressed in this article or post are only for the sole objective of providing information, and it does not constitute professional advice or recommendation of the company. Neither the author nor the company or its affiliates accepts any liability for any loss or damage arising from any information in this article or any actions taken in reliance thereon.

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