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Learn how to apply for a PAN card, a unique 10-character alphanumeric identifier issued by the Income Tax Department of India. PAN is essential for tracking financial transactions and ensuring tax compliance. Discover the application process and key details you need to know about obtaining your PAN card.
5 May 2024
Afinthrive Advisory
Purpose of PAN
PAN is primarily used for tracking financial transactions and ensuring tax compliance by individuals and entities. It is mandatory for various financial transactions such as filing income tax returns, opening bank accounts, investing in securities, buying or selling immovable properties, and conducting high-value transactions.
Format of PAN
PAN is a 10-character alphanumeric code in the format: ABCDE1234F. The first five characters are letters (A-Z), followed by four numerals (0-9), and ending with a letter (A-Z). The fourth character of PAN indicates the type of holder (individual, company, etc.).
Application for PAN:
Individuals and entities can apply for PAN through the NSDL (National Securities Depository Limited) or UTIITSL (UTI Infrastructure Technology and Services Limited) websites or authorized PAN service centers. The application can be made online or offline by submitting the required documents and payment of the prescribed fees.
Documents Required for PAN Application:
For individuals: Proof of identity (Aadhaar card, passport, voter ID, etc.), proof of address (Aadhaar card, passport, utility bill, etc.), and proof of date of birth (birth certificate, passport, etc.).For entities: Proof of identity and address of the entity, proof of date of incorporation/formation, and identity/address proofs of the authorized signatories.
Processing and Issuance of PAN:
Once the PAN application is submitted along with the required documents and fees, it is processed by NSDL or UTIITSL. Upon verification of the details provided, a unique PAN is generated and sent to the applicant’s address through post/mail.
Importance of PAN:
PAN is essential for various financial transactions and serves as a proof of identity for individuals and entities. It helps the government track taxable transactions, prevent tax evasion, and ensure compliance with tax laws.
Update and Correction of PAN Data:
In case of any changes or corrections required in PAN data (such as name, address, date of birth, etc.), individuals and entities can apply for PAN correction/update through the NSDL or UTIITSL portals by submitting the necessary documents and fees.
Validity of PAN:
PAN once allotted is valid for a lifetime and remains unchanged even in case of change of address, name, or other details. However, individuals and entities are required to update their PAN data whenever there are changes or corrections required.
Verification of PAN:
PAN details can be verified online through the Income Tax Department’s PAN verification portal (https://www1.incometaxindiaefiling.gov.in/e-FilingGS/Services/VerifyYourPanDeatils.html) by entering the PAN number and captcha code.
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A PAN card serves as a valid proof of identity for individuals and entities across India. It is widely accepted by government and private institutions.
Identification Proof
A PAN is mandatory for filing income tax returns, making it essential for taxpayers to comply with tax regulations and avoid penalties.
Filing Income Tax Returns
Banks require a PAN card to open a savings or current account, ensuring that the account holder’s financial transactions are tracked by the tax authorities.
Opening a Bank Account
PAN is required for high-value cash transactions such as deposits above ₹50,000 in a single day, helping to prevent money laundering and fraud.
Large Cash Transactions
Financial institutions require a PAN card when processing loan applications, ensuring transparency and accountability in the lending process.
Applying for Loans
For real estate transactions above ₹5 lakh, a PAN card is mandatory, helping to maintain records of large financial deals and curb black money.
Buying and Selling Property
PAN is required for investing in securities, mutual funds, and opening a demat account. It ensures that investments are linked to an individual’s financial profile.
Investments
When purchasing foreign currency or paying for travel expenses above ₹50,000, a PAN card is necessary, aiding in tracking foreign transactions.
Foreign Travel
PAN is needed for purchasing vehicles worth more than ₹5 lakh, ensuring transparency in high-value transactions.
Vehicle Purchase
For paying life insurance premiums exceeding ₹50,000 in a financial year, a PAN card is required, facilitating the monitoring of significant financial commitments.
Insurance Premiums
Points to make your decision easy
PAN is a nationally accepted proof of identity in India. It is unique to each holder and links all financial transactions made by an individual or entity.
PAN is required for bank account opening and is mandatory in various financial transactions. It must be quoted in your income tax return.
NRIs need PAN to claim benefits of non-deduction or lower-deduction in India. PAN is also required for purchasing or selling property in India.
Here is the check list of documents required.
Get Answers to your most asked questions.
PAN stands for Permanent Account Number. It is a unique 10-character alphanumeric identifier issued by the Income Tax Department of India to individuals, companies, firms, and other entities for tax-related purposes and financial transactions.
PAN is required for various financial transactions and tax-related purposes such as filing income tax returns, opening bank accounts, investing in securities, purchasing or selling immovable properties, and conducting high-value transactions.
Any individual or entity engaged in taxable transactions or financial activities in India, including residents, non-residents, companies, firms, trusts, and associations, needs to obtain PAN if their turnover or transactions exceed the prescribed threshold limits.
You can apply for PAN online through the NSDL (National Securities Depository Limited) or UTIITSL (UTI Infrastructure Technology and Services Limited) websites or authorized PAN service centers by filling out the PAN application form, submitting required documents, and paying the prescribed fees.
Documents required for PAN application include proof of identity (such as Aadhaar card, passport, voter ID), proof of address (Aadhaar card, passport, utility bill), proof of date of birth (birth certificate, passport), and photographs of the applicant.
Yes, there is a prescribed fee for PAN application, which varies based on the mode of application (online or offline) and the communication address (within India or outside India). The fee can be paid online or through demand draft.
PAN is typically allotted within 15-20 working days from the date of submission of the PAN application, provided all the documents and information provided are in order. The PAN card is sent to the applicant’s address through post/mail.
Yes, you can verify PAN details online through the Income Tax Department’s PAN verification portal by entering the PAN number and captcha code. This allows individuals and entities to verify the authenticity of PAN numbers provided by others for financial transactions or official purposes.
Yes, linking PAN with Aadhaar is mandatory as per the provisions of the Income Tax Act, 1961. It helps eliminate duplicate PANs and enables the government to track financial transactions more effectively.
PAN once allotted is valid for the lifetime of the holder and remains unchanged even in case of changes in personal details such as name, address, or other particulars.
