7 Things to Know About PAN Card

Pan Card

A PAN card, like an Aadhar card or a Voter IT Card, is one of the most important documents required to complete any major task. While you are most likely familiar with what a PAN card is and how it is used, there are a few things you should know about a PAN card.

Continue reading to learn more about what a PAN card is, the eligibility requirements for applying for one, the different types of PAN cards, and how to apply for one.

What is a PAN Card?

PAN  is an abbreviation of Permanent Account Number. The Income Tax Department of India assigns an alphanumeric, 10-digit unique number to each taxpayer. Each PAN number is unique and different for each individual.

  • The PAN number keeps track of a person’s financial activities and is required for all forms of payment
  • A PAN card appears to be a physical plastic card with one’s PAN number, name, DOB, and a photograph printed on it
  • The PAN number is valid for life because it is unaffected by changes in address or job profile and can thus be used as proof of identity

Structure of a PAN Card

A PAN card is much more than just a card with the user’s basic information. It is designed in such a way that each special character, alphabet, and so on define various different things written on it. The following is an example of a PAN card structure:

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  1. The first five characters of the Permanent Account Number are always uppercase letters, followed by four numerals, and the tenth or final character is a letter. ‘AAA XX123 4B’ is an example
  2. The PAN number’s first three characters form an alphabetic sequence
  3. The fourth character identifies the cardholder type, which can be either an individual or a person. For instance, BBBPZ123XA

Each cardholder type is defined by the letter given below-

A- Association of persons (AOP)

B- Body of Individuals (BOI)

C- Company

F- Firm

G- Government

H- HUF (Hindu Undivided Family)

L- Local Authority

J- Artificial Juridical Person

P- Individual or Person

T- Trust (AOP)

  1. The fifth character in the PAN Card number is either-

the person’s surname or last name (in the case of a “Personal” PAN card)

Name of the trust, society, entity, or organisation (in the event that the fourth character is any of the letters “C”, “H”, “F”, “A”, “T”, “L”, “J”, “G”, or “A”)

  1. The tenth or final character is an alphabetic digit used to validate the current code

What are the Types of PAN Cards?

There are several types of PAN cards available, each with a specific purpose, as explained below:

  • PAN card for organizations and companies
  • PAN card for Cooperative Societies and Trusts
  • PAN card for Individual taxpayers
  • PAN card for business units or partnership firms

Who is Eligible for a PAN Card?

According to the Income Tax Act, Indian residents who fall into the following categories are eligible to obtain a PAN card:

Self-employed professionals or businessmen whose annual turnover is Rs. 5 lakh or more

Individuals who are liable to pay tax or who pay tax

Individuals who are into import and export activities

Registered associations, organizations, trusts

In addition, NRIs (Non-Resident Indians), PIOs (Person of Indian Origin), OCIs (Overseas Citizens of India), cardholders, and foreigners who fall under the purview of the Income Tax Act of 1961 are eligible to apply for a PAN card. Furthermore, parents can apply for a PAN card on behalf of their minor children.

When is a PAN Card Used?

Apart from the Income Tax Purposes, a PAN Card is used in the following cases- 

Identity Documentation

Aside from an AADHAR card or voter ID card, you can use a PAN card as proof of identity. PAN cards are accepted for a variety of financial transactions.

Returns on Income

Individuals and entities who are eligible to file IT returns must have a PAN card.

Claim on income tax returns

There are times when the TDS deducted exceeds the actual tax to be paid. In such cases, the excess amount can be claimed by linking the PAN card to the taxpayer’s bank account.

Open a bank account

You can easily open a bank account by submitting the necessary documents, such as a PAN card

For real estate purposes

A PAN card is required as proof when buying, renting, or selling property.

To acquire a loan

At the time of loan application, you must submit all required documents, including your PAN card. A PAN card is required for any type of loan, whether it is an education loan, a personal loan, or another.

For fixed deposits

A PAN card is required if you want to invest an amount of more than Rs. 50,000 as a Fixed Deposit. It is required as the bank will deduct TDS on the FD interest amount.

For telephone connections

If you want to get a new phone or mobile connection, you must provide your PAN number to the cellular operators.

To buy jewellery

You must submit your PAN card details to buy jewellery valued at more than Rs 5,00,000

Foreign Exchange

You must submit your PAN card details to the money exchange institution if you want to convert your Indian currency into foreign currency.

For the purpose of investment

If you intend to invest in securities, you must provide your PAN details to the relevant authorities for transactions exceeding Rs. 50,000. PAN card information is also required for mutual funds, debentures, and equities.

Purchase of goods & services

The purchaser or seller must provide his or her PAN card information for transactions involving more than Rs. 2 lakh in the purchase or sale of goods and services

What are the Documents Required to Apply for a PAN Card?

To apply for a PAN card, the following documents must be submitted-

IndividualsCopy of Passport, Voter ID card, POI/POA, Aadhar card, Driving license
TrustCopy of Trust deed copy or certificate of registration number
CompaniesCopy of Certificate of Registration issued by Registrar of Companies
Hindu Undivided Family (HUF)Copy of HUF affidavit issued by Head of HUF and POI/POA details, Date of Birth Proof
Partnership/FirmsCopy of Certificate of Registration issued by the Registrar of Firms/Limited Liability Partnership and Partnership Deed
SocietyCopy of Certificate of Registration number from Registrar of Co-operative Society or Charity Commissioner
ForeignersPassport PIO/OCI card issued by Indian Government, Bank Statement of the residential country, Copy of NRE bank statement in India

How to Apply for a PAN Card?

There are two ways to apply for a PAN card- Online and Offline. Follow the steps written below to apply for a PAN card:

Apply for a PAN Card Online

  • Visit the official web portal of NSDL or UTIITSL
  • Locate the PAN application form and duly fill it properly
  • Submit all required documents along with two passport-sized photographs
  • Pay the applicable fee
  • Your PAN card will be delivered to your registered address within 15 days, or to the applicant’s communication address, whichever is later

Apply for a PAN Card Offline

  • Visit the PAN centre 
  • Fill in the PAN application form with accurate information and submit 2 passport size photographs
  • Now, submit all the supporting documents, and processing fees along with the application
  • Your PAN card will be delivered within 15 days of the date of submission

FAQs
Can I obtain 2 PAN cards?
No, it is an offence to hold more than one PAN card, for which a penalty of Rs 10,000 is imposed.
How long does the PAN card remain valid?
A PAN card remains valid for a lifetime.
What to do if I have lost my PAN card?
In case of a lost PAN card, apply for a duplicate PAN card either online or offline.
What are the types of PAN card application forms?
There are two types of PAN card forms- Form 49A, meant for Indian citizens and Form 49AA, meant for foreigners.
Is it mandatory to quote PAN on return of Income?
Yes, it is mandatory to quote PAN on return of income, a penalty of Rs. 10,000 is levied in case of any default.
Is it compulsory to submit a photograph with a PAN application?
Yes, it is compulsory to submit a photograph in the case of an individual applicant.
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