What is a PAN card?

A permanent account number (PAN) is a distinct identification number issued by the income tax department of India to identify taxpayers in the country. This number enumerates the complete tax-related information of a person. On application, a PAN card is issued to the individual, with the PAN, name, photograph, date of birth and Father’s name.

In the present technology-run world, this unique identifier can be obtained in an electronic format as well. It is digitally signed and its purpose stays equivalent to that of the PAN card. The primary purpose of the card is for making IT returns filing. This card holds a detailed record of all the financial transactions made by an individual or a firm and is issued to prevent tax evasion of any sort. The requirement of a PAN/e-PAN card is also made mandatory to open a new account in a public, private, or cooperative bank.


Benefits of e-PAN

  • In the time of a global pandemic, it ensures that the process of obtaining it is secure and completed in a free-of-contact manner.
  • The actual process of receiving a PAN takes around 15 to 20 days whereas e-PAN does not take longer than 48 hours once all the necessary documents get uploaded in the portal.
  • This method does not involve paperwork, thereby making the entire process cost-free for the applicants.

Eligibility criteria for E-PAN

  • The IT department will not issue an online PAN if an individual already possesses a physical PAN card.
  • Any applicant domiciled in India must not be less than the age of 18 as per the Majority Act of 1875.
  • The applicant must have an Aadhar card and a registered mobile number that is linked to it.
  • You must be an individual taxpayer which means E-PAN cannot be issued to HUF or company etc.

Procedure to apply for e-PAN?

Application for a fresh allotment of online PANs can be made by following a few no-sweat, simple steps.

  • Step 1(a): Go to www.incometax.gov.in and click on the e-filing link present on the homepage of the website.

    incometax

    Or Step 1(b): Go to UTIITSL PAN online portal directly and then add in your details as present in your Aadhar card.

    UTIITSL PAN online

  • Step 2: Select the "Instant E PAN through Aadhar" option from Quick links

    Instant E PAN through Aadhar

  • Step 3: Enter all the details as per your Aadhar card. The personal information entered is immediately verified and acknowledged.

     Aadhar card

  • Step 4: You must sign on a blank sheet of paper and scan it with the specifications mentioned on the page.
  • Step 5: Click "Submit PAN request" on completion of document upload.
  • Step 6: The process for the application of e-PAN gets initiated and you will receive a 15 digit acknowledgment number.
  • Step 7: You can check the status of your e-PAN from the NSDL weblink by clicking on "Check Application Status" using your application number.

    Check Application Status

    Or Step 7(a): You can check the status of your E-PAN from the INCOME TAX PORTAL also by clicking on Instant E PAN and then clicking on check status and download PAN.
  • Step 8: When your e-PAN is ready, you will be notified through a text message or an e-mail.

Is owning a PAN/e-PAN card mandatory?

It is indeed mandatory for people falling into the brackets of the conditions mentioned below:

  • Everybody including citizens of India, minors, and foreigners who are liable to pay taxes or carrying out specific financial transactions like a high-value cash deposit or withdrawal in the bank are supposed to apply and own a digital or a physical PAN card.
  • It is important for making deposits over rupees 50,000 in mutual funds.
  • For the purchase of immovable property worth over 10 lakhs.
  • If fixed deposit exceeds 50000 in one go or aggregating to more than 5 lakh during a Financial year.
  • For the purchase and the sale of heavier motor vehicles excluding less bulky two-wheelers.
  • To open a bank account or a Demat account and apply for a credit or a debit card.
  • Hotel and restaurant bill paid in cash in excess of Rs. 50,000 and any other specified transactions

What to do when you don't own a PAN?

  • After the Government made a few reformations to the pre-existing rules, it is possible to interchange your PAN and Aadhar number. Those who do not possess a PAN/e-PAN card can quote their unique Aadhar card number in the place of PAN as they are already linked with each other.
  • Another method is by filling out Form 60 which is nothing but a signed declaration that the individual does exceed the tax limit and therefore does not possess a PAN/E-PAN card.
  • Minors can easily quote the PAN of their parents or somebody who they are under the guardianship of when they are not liable to file Income Tax Returns.

Different types of PAN/e-PAN cards

There exist four different types depending on the entity and the form of their income tax payments.

  • 1. PAN/e-PAN for Indian residents
  • 2. PAN/e-PAN for foreign citizens
  • 3. PAN/e-PAN for Indian firms
  • 4. PAN/e-PAN for foreign industries

The sole difference between a company PAN card and an individual's PAN card is that signature and a photograph are not required for the former.
Both the cards hold individual's/company's name, date of registration, quick response (QR) code, a hologram of the government, the tag of the Income Tax Department, the 10 characters alphanumeric permanent account number, and the date of issue of the card in common.


Know what constitutes your PAN

Among the 10 alphanumeric characters, the first

five are from the English alphabet. The next four are from the numerical and the last one being an alphabet again. The first three alphabets form a random combination of the English alphabet. The fourth character represents the status of that particular individual. There are nine divisions in total. They are C, H, F, A, T, B, L, J, P and G. Each of them stands for company, Hindu undivided family, partnership firm, an association of persons, trust, a body of individuals, local authority, artificial judicial person, individual and the Government respectively.

The fifth alphabet is the first letter of the individual's surname. The PAN number remains unchanged even if the person changes the last name post marriage.

The next four digits are sequential yet random numbers between 0001 to 9999.
The final character is an alphabetic check digit which is generated by applying a formula to the preceding nine letters and numbers.


Is this important?

Yes, this slightly complicated classification of the unique identity proof is extremely important. It is because no information shared between the two parties can be tampered with at any cost and the data remains highly secured. The Government also uses this number to track down every single financial transaction made by the person to calculate the taxation amount.


Penalty for Multiple/Duplicate cards

According to seventh provision of Section 139A of the Income Tax Act, 1961, an individual can hold only one permanent account number. There are strict regulations tied to it and if an individual possesses more than one or a duplicate card, legal action will be taken.

As per Section 272B of the Income Tax Act, a penalty of rupees 10,000 will be imposed by the Government of India.


How to cancel or surrender a PAN/e-PAN card?

Offline Method-
a) By visiting your local income tax office and handing over a request letter addressing the Assessing Officer (AO) to cancel or surrender your card. You will receive an acknowledgment slip which must be kept safely.
b) As another option, you can fill up Form 49A for any alteration in PAN and submit it to the closest UTI or NSDL TIN facilitation center.

Online Method-
Step 1: By visiting the National Securities Depository Limited (NSDL) website.
Step 2: Provide the details of the PAN/e-PAN card that you want to surrender along with your details and contact number.
Step 3: Press Submit and wait for the process to get completed.


Further information about the card

This unique number must be acquired by every citizen of India as it is repeatedly required for important activities involved in our everyday lives. The Government of India is making substantial efforts to expand the density of the PAN/e-PAN cardholders to include more people under the tax net.


CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.

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