Permanent Account Number

Introduction

Permanent Account Number (PAN) is a taxpayer’s permanent identification number allotted by the Income-tax Department. PAN once allotted remains valid unless cancelled or changed by the Department. PAN consists of ten alphanumeric characters with first 5 characters consisting of alphabets, next 4 characters consisting of numbers and last character again consisting of alphabet and may be issued as a laminated card or in electronic form (e-PAN).

Necessity and uses of PAN

Assessees must quote PAN in:

(i) Income-tax returns and all correspondence with the Income-tax Department.

(ii) All challans for payment of tax, interest, or penalty.

(iii) Documents relating to the following transactions:

• Sale or purchase of a motor vehicle or motor cycle of an amount exceeding Rs. 5,00,000.
• Time deposits with banks including cooperative banks or post offices or Nidhi companies, or NBFCs, wherein the amount of single time deposit exceeds Rs. 50,000 or aggregate amount of all time deposits exceeds Rs. 5,00,000 in a financial year.
• Sale or purchase of securities or unlisted shares of a company, exceeding Rs. 1,00,000 for each transaction.
• Opening of a bank account.
• Cash Payments to hotels or restaurants against a bill or bills at any one time exceeding Rs. 1,00,000.
• Cash deposits or withdrawal aggregating to Rs. 10,00,000 or more in a financial year with a bank including a co-operative bank & post Office.
• Payments to RBI exceeding Rs. 50,000 for acquiring its bonds.
• Purchase or sale of goods or services exceeding Rs. 2,00,000 per transaction.
• Payments exceeding Rs. 50,000 for acquiring debentures, bonds, or mutual fund units.
• For issue of a Credit or Debit card.
• For opening of a Demat Account.
• Purchase, sale, gift, or execution of a joint development agreement in respect of any immovable property where the amount or stamp duty value exceeds Rs. 20,00,000.
• On commencement of an account-based relationship with an insurer where the premium of policy exceeds Rs. 50,000 in a financial year.

Any person whose income is subject to TDS must intimate their PAN to the deductor.

Any person, not being a company or a firm, who does not have a permanent account number and who enters into any of the above mentioned specified transaction, shall make a declaration in Form No. 97 giving therein the particulars of such transaction.
 

Application procedures

Applications for PAN U/s.262 must be submitted using Form 93/94 (Indian citizens/entities) or Form 95/96 (foreign citizens/entities). Online applications may be made through Protean (formerly NSDL eGov) https://tinpan.proteantech.in/services/pan/pan-index. The steps are:

1. Visit the Protean (formerly NSDL eGov) portal and go to “Apply Online”.

2. Review the guidelines on required documents for the applicable form and click on “Apply Now”.

3. Select the application type and category and complete mandatory fields.

4. Correct any validation errors displayed.

5. Resubmit the form after rectifications.

6. Review and confirm details shown on the confirmation screen.

7. Edit if corrections are needed; otherwise, confirm.

8. Make payment of appropriate fees.

9. Send supporting documents via post/courier to Protean (formerly NSDL eGov) for processing.
 

Documents required

1. Proof of Identity

2. Proof of Date of Birth/Date of Incorporation (as applicable)

3. Proof of Address

Kindly visit following links for the detailed list of accepted documents:

For form 93/94: https://tinpan.proteantech.in/services/pan/documents-form_93-form_94.html

For form 95/96: https://tinpan.proteantech.in/services/pan/foreign-citizen.html         

Linking of Aadhaar with PAN

Any person having allotted Aadhaar must quote Aadhaar in:

        - Application forms for PAN allotment, and

       - Income-tax returns.

If Aadhaar is not yet allotted, the Aadhaar enrolment ID may be quoted.

Key issues under application

- Do not use abbreviations or initials in the name fields.

- Do not apply for a new PAN if one already exists.
 

Penalties

Failure to comply with the provisions of section 262 may attract a penalty of Rs. 10,000 under section 467, i.e. penalty applies for failure to apply for PAN, failure to quote PAN, failure to intimate PAN for the purpose of deducting TDS or for collecting TCS, or quoting a false PAN. Penalty will not be levied unless the person on whom such penalty is levied is given reasonable opportunity of being heard.