How to apply for a PAN card? Eligibility & Benefits

To avoid miscalculations and errors in tax assessments, the Permanent Account Number (PAN) system was enabled by the Income Tax Department. The earlier system of tax assessments of the citizens of India was not unique to every individual. Hence, PAN was taken into force by the Government of India in the year 1972, where a unique identification was provided to all the eligible taxpayers of the country.

What is PAN?

PAN stands for Permanent Account Number. A PAN is issued by the Income Tax Department, Government of India, to identify various taxpayers in the country. PAN is a unique identification number containing both alphabets and numbers. This 10 digits alphanumeric number is assigned to Indian taxpayers, whether persons or companies, with a motive to store all tax-related information against a single PAN number. The motive behind the introduction of PAN was that no two tax-paying entities can have a single PAN number. 

Structure of PAN

Understanding the structure of PAN is very important. The 10 digits combination of alphabets and numbers aren’t random, they have a significance. 

• The first 3 characters are derived from English alphabetic series ranging from ‘AAA’ to ‘ZZZ’. 
• The fourth character is an alphabet which helps to identify the status of the PAN holder. It can be any one of the following- 

• A – Association of Persons

• B – Body of Individuals

• C – Company

• F – Firms

• G – Government

• H – Hindu Undivided Family

• L – Local Authority

• J – Artificial Judicial Person

• P – Individual

• T – Association of Persons for a Trust 

• The fifth character is an alphabet denoting the initial character of the PAN card holder’s name. 
• The next four digits are numbers ranging from 0001 to 9999.
• The last character is an alphabetic check digit.

Types of PAN cards

1. PAN Card for Indian Individuals

2. PAN Card for Indian Companies

3. PAN for Foreign Citizens

4. PAN for Foreign Companies

Features of PAN Card

A PAN has the following features on it- 

• Name of the Cardholder; 
• Date of Birth(DOB) of the cardholder;
• Father’s name of the cardholder; 
• Permanent Account Number (10 digit alphanumeric number);
• Photograph of the cardholder; and
• Signature of the cardholder. 

Benefits of PAN

1. Identity proof- A Permanent Account Number serves as a basic identity proof of the holder as it contains all the required information such as their name, DOB, signature, photograph etc. 
2. Recording transactions- A PAN helps store and record a taxpayer’s financial transactions. It helps in determining the total revenue of the taxpayer and the rate of taxes they have to pay. 
3. No misuse- Since there is a single PAN for a single individual, company or trust, there are no chances of misuse of information and miscalculations of tax assessments. 
4. Starting a business- PAN is an essential document to start a new business. Companies need to have a PAN card to start a new business. 
5. Tax deduction- having a PAN card helps the individual to save taxes as PAN helps to save TDS. 
6. Opening accounts- Having a PAN card helps the individual to open bank accounts and demat accounts as PAN serves as an identity proof for the cardholder. 
7. Government Subsidies: It is required to avail of government subsidies and schemes like LPG subsidy, pension scheme, etc
8. KYC (Know Your Customer): It is a mandatory document for completing the KYC process for various financial products and services. 
9. Applying for a credit card: PAN card is a mandatory document required for applying for a credit card. It helps the credit card company to verify your identity and creditworthiness.
10. ITR filing- A Permanent Account Number is necessary to file Income Tax Returns(ITR). All the individuals holding PAN need to file ITR. 
11. Banking transactions– PAN helps the holder to carry out banking-related transactions such as cash deposits and withdrawals, applying for loans, opting for pay orders etc.
12. To buy jewelry- To buy jewelry of more than ₹5,00,000, submitting PAN is a must. 
13. Sale and Purchase of Immovable properties– If an individual wishes to deal in immovable properties, i.e., their sale and purchase, they must provide their PAN details to carry out the transaction. 
14. Helpful to Government- Apart from its benefits to citizens and holders, a PAN is also helpful to the Government of India as it helps to keep a record of financial transactions, to know the taxes, to know the revenues etc.

How to apply for PAN

The Income Tax Department has authorized the following to issue PAN cards- 

• UTI Infrastructure Technology and Services Limited (UTIITSL)  

• National Securities Depository Limited (NSDL)  

A PAN can be applied in both online and offline ways- 

How to apply for PAN Offline

1. Get the 49A application form (in case of Indian resident) or 49AA application form (in case of Non-Resident Indian or a foreign company) from the service centers set up by the UTIITSL or NSDL.
2. Fill out the form as required.
3. Individual applicants need to fix two recent colored photographs of size 3.5 cms x 2.5. cms. 
4. Attach the required documents such as proof of Identity, Address and Date of Birth. 
5. Submit the processing fee which can also be paid via demand daft. 
6. Enclose the application form and photocopies of your documents in an envelope.
7. On the envelope, remember to mention the ‘APPLICATION FOR PAN-N-Acknowledgement Number’.
8. Send it to the given address. 
9. On approval, PAN will be dispatched within 15 days. 

How to apply for PAN Online

1. Visit the official website of UTIITSL or NSDL.
2. Select the type of application and choose your category. 
3. Provide the required documents as name, DOB, photograph, signature etc. 
4. Enter the Captcha and agree to the ‘Terms and Conditions’. 
5. Click on submit. 
6. Then you will be directed to a new page where you will get an acknowledgement number.
7. Fill the required details. 
8. Submit the details and pay the processing fee. 
9. Your application will be submitted and on approval, PAN will be issued to you. 

Provisions of Section 139A

Section 139A states that- 

With effect from 1st July, 2017, any person holding an Aadhaar card must mention their Aadhaar card number on the PAN application form. 

If an individual has applied for an Aadhaar card, then they need to mention the Aadhar Enrolment number in the PAN application form.

However, the provisions of Section 139A do not apply in cases of an individual who neither has an Aadhaar card nor has applied for the same and is- 

• residing in any of these States-Assam, Jammu and Kashmir and Meghalaya;
• a non-resident as per the Income-tax Act, 1961;
• of the age of 80 years or more at any time during the previous year, i.e., super-senior citizen;
• not a citizen of India.

Instant PAN

The Income Tax Department has introduced an easy way to get a PAN in which an applicant can apply for a PAN card on the basis of their Aadhaar card. However, for this following conditions must be fulfilled by the applicant- 

• The applicant has never been allotted a PAN.
• The applicant’s Aadhaar card shows their correct Date of Birth. 
• The applicant’s mobile number is linked to their Aadhaar card. 
• The applicant is not a minor while filling out the PAN application form. 

The process to apply for Instant PAN

1. Click on the https://www.incometaxindiaefiling.gov.in/home website and select the ‘Instant PAN through Aadhaar’ option. 
2. Select ‘New PAN’ and enter the Aadhaar number. 
3. Enter the OTP received on the mobile number which is linked to the Aadhaar number.
4. Verify the Aadhaar details and the E-mail ID. 
5. Download the e-PAN.  

Documents required for PAN

There are basically two types of documents required for PAN

• Proof of address(POA)
• Proof of Identity:

1. For individuals- 

Identity proof/ Address proof like aadhaar card, voter ID, driving license, passport

2. For Companies- 

A copy of the Registration Certificate issued by the Registrar of Companies.

3. For Trusts- 

A copy of the Registration Certificate Number issued by the Charity Commissioner, copy of Trust Deed

4. For HUF- 

Affidavit issued by the head of the family(Karta) which includes name, address, coparcener’s name etc. 

• Identity proof
• Address proof.

5. For Associations- 

A copy of the Registration Certificate Number issued by the Registrar of Co-operative Society or Charity Commissioner. 

6. Foreigners: 

Passport PIO/OCI card issued by the Indian Government Bank statement of the residential country copy of NRE bank statement in India.

Cost of PAN

An individual can apply for PAN online or offline. For this certain fee or cost is associated with the PAN, which is described below- 

• For Indian communication address: Rs.93 (excluding GST)

• For foreign communication address: Rs.864 (excluding GST)

Final Words

PAN is a Permanent Account Number, a 10 digit unique identification number issued by the Government of India, Income Tax Department. It is denoted to each taxpayer of the country to record all the financial transactions of the taxpayer. A PAN card is a physical card held by an Indian taxpayer with their name, signature, date of birth, etc. 

A PAN card is a crucial document held by taxpayers which helps them in various ways. The government also benefits from it as it helps to give a view of the total revenues and taxes. Any individual, company, NRI, trusts, or anyone eligible to pay taxes under the Income Tax Act must hold a PAN card. A person can easily apply for a PAN card by visiting the NSDL website or filling out the offline application form. 

Frequently Asked Questions

1. What to do if a person has lost his PAN card?

If an individual has lost his original PAN card, they can apply for a duplicate PAN card offline or online. 

2. How to fill the PAN application form?

PAN application form needs to be filled in legible English with Capital Letters. Make sure to follow all the given instructions. 

3. Is it required for females to correct their father’s name on their PAN card after marriage?

No, females will always have their father’s name on the PAN card. It need not be changed irrespective of marital status. 

4. How many photographs are required in PAN form?

For individuals, 2 recent color photographs in white background with size 3.5 cm x 2.5 cm is required.