PAN card is also known as Permanent Account Number. It is known as a way to identify different taxpayers in the country or to track the financial transactions of the citizens. It is a unique identification number given to a person paying taxes in India. PAN identification system is a computer based system assigned to every Indian tax paying entity.
What is the idea behind having a PAN Card?
The PAN card is the same as the Social Security Membership or SSN used in the United States. The purpose of SSN is to track individuals for social security purposes. It becomes the primary identification number for the taxation processes. PAN Card issued under the Indian Income Tax Act, 1961 under the supervision of the Central Board of Direct Taxes (CBDT).
Need for PAN Card?
- You will need a PAN card for filing IT returns. This is the main reason why everyone applies for PAN card.
- PAN card is important when you are planning to apply for a loan. Every lending bank and other institution requires PAN card details to approve the loan application. Not only this, PAN card is also required for verification for educational and personal loans.
- If you have a PAN card, you can easily open a current bank account or savings account. Be it co-operative bank, public sector bank or private sector bank.
- If you are depositing more than 50,000 cash at a time, then it is being made mandatory to give PAN card information as per RBI rules.
- If you are planning to invest more than 50,000 in the form of a fixed deposit in a bank, you will also need to provide PAN card details. This is very important as TDS is being deducted by the bank on the interest received through FD.
- Even if you want to go for mutual funds, debentures or bonds for transactions above Rs 50,000, PAN card is a necessary document.
- Bank institutions, currency exchange bureaus also feel the need for PAN card details for currency exchange.
- It is mandatory to provide PAN card details while applying for a credit card or debit card.
- PAN card details are required at the time of buying or selling for all vehicles above Rs.5,00,000.
- PAN card also acts as an identity proof, so it can be used while applying for other government identity proofs.
- If you have purchased jewelry worth more than 5,00,000 then you will also need to provide PAN details.
- For making an insurance payment that exceeds Rs 50,000 annually, PAN card details are also required to be provided.
What is the new design of the PAN Card?
- The Income Tax Department has come up with a new format of PAN Card which is issued after January 01, 2017. A quick response (QR code) is printed on the new PAN card containing the details of the card holder. This QR code can be used for data verification
- Secondly, new sections have been added for the cardholder’s name, father’s name and date of birth of this cardholder.
- The location of the PAN and signature of the cardholder are also being changed.
- Every person has a different PAN number because no two persons who are tax entities can have the same PAN number.
What is the validity of the PAN card?
PAN Card is valid for the entire lifetime as PAN number does not changes even you update any information.
What are different types of PAN Card?
PAN card for individuals is the most common and can be applied through Form 49A, which is available online on the Income Tax Department, NSDL and UTIITSL websites. The category includes resident Indians. Indian minors and students are also eligible to apply for a PAN card.
For NRIs or other Persons of Indian origin
NRIs and PIOs can avail PAN card for For taxation purposes in India, they can do so by applying for a PAN card through Form 49A.
For foreign entities paying tax in India
Firms or large corporate, which are registered outside India and pay taxes in India can also avail of a PAN Card. They can do so by filling out the Form 49AA.
For OCI and NRE
Overseas Citizens of India (OCI) and Non-Resident Entities (NRE) can also apply for a PAN Card in India. They can do so by applying for the PAN card using Form 49AA.
For Indian Companies
Firms and corporate entities that are registered and operational in India can also apply for a PAN Card. They need a PAN card for financial and tax-related transactions.
How to fill the PAN Card application?
There are two ways in which PAN card application can be done either online By visiting NSDL website or applying in any of the PAN agencies at district level as offline mode in the agency. There are two forms of PAN application, one is for citizens of India, 49A and the other 49AA is for foreigners. PAN application can be done both for new PAN as well as for reprint and correction of your existing PAN card. To make the application process successful, please provide all required documents to support the application.
Application form for new PAN and reprint of PAN are different. Once the user applies for any of the above mentioned PAN card applications, he/she can easily track the PAN status with the help of the acknowledgment number generated by NSDL.