What is PAN?
Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department, to any person who applies for it or to whom the department allots the number without an application.
PAN enables the department to link all transactions of the PAN holder with the department. These transactions include tax payments, TDS/TCS credits, returns of income/wealth/gift/FBT, specified transactions, correspondence, and so on. PAN, thus, acts as an identifier for the person with the tax department. It also serves as an important ID proof.
Why is it necessary to have PAN?
It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. It is also compulsory to quote PAN in all documents pertaining to the following financial transactions:
- Sale or purchase of any immovable property valued at five lakh rupees or more
- Sale or purchase of a motor vehicle or vehicle
- A time deposit, exceeding fifty thousand rupees, with a banking company
- A deposit, exceeding fifty thousand rupees, in any account with Post Office Savings Bank
- A contract of a value exceeding one lakh rupees for sale or purchase of securities
- Opening a bank account
- Making an application for installation of a telephone connection (including a cellular telephone connection)
- Payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time
- Payment in cash for purchase of bank drafts or pay orders or banker’s cheques for an amount aggregating fifty thousand rupees or more during any one day
- Deposit in cash aggregating fifty thousand rupees or more with a bank during any one day
- Payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time.
The primary purpose of PAN is to bring a universal identification key factor for all financial transactions and indirectly prevent tax evasion by keeping a track of monetary transactions of high net worth individuals.
Who must obtain PAN?
The following persons need to obtain PAN:
- All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others, must obtain PAN.
- Any person carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed five lakh rupees in any previous year.
- Any person, who intends to enter into financial transaction where quoting PAN is mandatory, must also obtain PAN.
- The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.
How to Obtain PAN?
The application for PAN must be made on Form 49A, which can be obtained from IT PAN Service Centers or TIN Facilitation Centers, or can be downloaded from the website of the Income Tax Department, UTI Investor Services or NSDL. The completed form is then submitted to any TIN Facilitation Center or PAN Service Center.
The following documents should be attached with the application form:
- Proof of identity
- Proof of address
- Photograph (For Individual applicants)
Non Residents, have the option of applying through a resident representative, or they can apply directly in case they are residents of one of the 90+ countries listed on their web site as mailing locations.
How we may help you?
Our team has the hands on experience of obtaining PAN for our clients. We can assist you in:
- Filing the application form
- Liaising with the authorities
- Obtaining PAN
- Addressing any queries raised by the department.