Must Knows

Permanent Account Number (PAN): All you must know

[] A Permanent Account Number is a unique 10-digit alphanumeric number allotted to taxpayers in India. Here’s a complete guide.

Permanent Account Number, known as PAN, is a unique 10-digit alphanumeric number allotted to Indian taxpayers by the Income Tax Department under the Income Tax Act, 1961.

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The government keeps track of an individual’s tax-related activities and transactions using their unique permanent account number. This enables the tax collector to associate all tax-related operations with the department.

What is a PAN Card?

  • The PAN number records a person’s financial transactions and is necessary for all methods of payment.
  • A PAN card is a literal plastic card bearing one’s PAN number, name, DOB, and photographs.
  • Since it is unaffected by alterations in address or job profile, the PAN number is valid for life and can therefore be used as a form of identification.

Permanent Account Number: Structure

  • The initial three characters – alphabetical series that runs from AAA to ZZZ
  • The fourth character – It represents a PAN holder’s status. For example, “P” stands for a person, while “F” stands for a firm.
  • The fifth character  – The first letter of the PAN holder’s surname
  • The following four characters – From 0001 to 9999 in a numerical series
  • The final character – An alphabetic check digit

Different kinds of PAN Cards

There are numerous PAN cards offered, each with a unique purpose.

  • PAN card for businesses and organisations
  • Cooperative Societies and Trusts PAN card
  • Individual taxpayers have to have a PAN card.
  • PAN card for corporations or partnerships

Who qualifies for a PAN Card?

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The Income Tax Act states that Indian citizens who fall into four categories are entitled to receive a PAN card:

  1. Self-employed workers or business owners with annual revenue of Rs. 5 lakh or more
  2. Persons who are tax liable or who pay income tax
  3. Individuals involved in import and export operations
  4. Registered organisations, associations, and trusts

NRIs (Non-resident Indians), PIOs (Persons of Indian Origin), OCIs (Overseas Citizens of India), and foreigners recognised by the Income Tax Act of 1961, in addition to Indian citizens, are eligible to apply for a PAN card.

The benefits of a PAN Card

Mandatory for all contacts and transactions to and from the Income Tax Department of India

You must have a unique PAN number to claim a tax refund, pay tax, submit tax deducted at source or tax collected at source, and so on.

Identity verification

A PAN card is recognised as a valid form of identification throughout the country. It includes all pertinent information such as name, date of birth, photograph, signature, and so on.

Allows payment verification

A PAN card guarantees that each of your payments is grouped together under your PAN number, making it easier to authenticate your payments.

Several financial transactions require the use of a PAN card

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A PAN card is required for some financial operations, such as the sale and purchase of automobiles other than two-wheelers, the application for a credit or debit card, the registration of a Demat account with SEBI, etc.

Business registration

A company, a firm, a HUF, or any other entity cannot operate their business without a PAN card.

Online PAN Card verification: Documents required

The following are the documents that an entity must provide for online PAN Card verification:

Organisational details

  • The entity’s name
  • Personal information about 
  • Personal details of the entity
  • PAN and TAN of the entity
  • The entity’s contact information
  • Entity classification

Signature details

  • Digital signature certificate serial number
  • The certifying authority’s name
  • Digital signature certificate class

Payment details

  • Payment method
  • Amount of payment
  • The number of instruments

How to apply for a PAN Card via NSDL

  1. Go to the NSDL website and select ‘Application Type.’
  2. Select the appropriate application form: Form 49A is for Indian citizens, while Form 49AA is for foreign citizens.
  3. Next, pick the classification from the options available
  4. Enter your details carefully, such as title and full name.
  5. Choose your DOB/Incorporation/Formation date in the DD/MM/YY format.
  6. Enter your active email address and a valid mobile number.
  7. Mark the guidelines with a tick.
  8. Finish the PAN application after entering the CAPTCHA code.
  9. You will then be led to the payment page, where you must pay Rs 93 for your PAN card. If you chose Form 49AA, you would have to pay Rs 864. Complete the transaction.
  10. You will obtain an acknowledgement number page after successfully submitting your PAN card application. Print a copy and store it safely for future reference.
  11. Place your passport-sized photo on the acknowledgement page, sign it with black ink, and return the acknowledgement receipt to the Income Tax Department. Submit your residential verification, identity proof, or other support documents, together with the receipt, within 15 days of the date of the online process.
  12. Following the successful validation of your papers, your PAN card number will be sent to your given mobile number and email address.

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Category: Must Knows

Debora Berti

Università degli Studi di Firenze, IT

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