Permanent Account Number (PAN) Card Registration

A permanent account number (PAN) is a ten-character alphanumeric identifier Foundational ID, issued in the form of a laminated “PAN card”, by the Indian Income Tax Department, to any person who applies for it or to whom the department allots the number without an application. It can also be obtained in the form of a PDF file known as e-PAN from the website of the Indian Income Tax Department.

A PAN is a unique identifier issued to all judicial entities identifiable under the Indian Income Tax Act, 1961. The income tax PAN and its linked card are issued under Section 139A of the Income Tax Act. It is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and it also serves as an important proof of identification.

It is also issued to foreign nationals (such as investors) subject to a valid visa, and hence a PAN card is not acceptable as proof of Indian citizenship. A Permanent Account Number (PAN) is necessary for filing income tax returns (ITR).

Tej and Associates offers PAN along with other essential tax services like TAN, TDS, TRC, GST registrations, Shops Act, MSME registration, Professional Tax ,Employee Provident Fund .  Employee State Insurance, Non STPI and STPI, Import Export Code, and Trade Licence. 

STRUCTURE OF Permanent Account Number (PAN)

The PAN (or PAN number) is a ten-character long alpha-numeric unique identifier.

The PAN structure is as follows: Fourth character [P — Individual or Person] Example: AAAPZ1234C

• The first five characters are letters (in uppercase by default), followed by four numerals, and the last (tenth) character is a letter.
• The first three characters of the code are three letters forming a sequence of alphabetical letters from AAA to ZZZ
• The fourth character identifies the type of holder of the card. Each holder type is uniquely defined by a letter from the list below:

A — AOP (Association of persons)

B — BOI (Body of individuals)

C — Company

F — Firm

G — Government

H — HUF (Hindu Undivided Family)

L — Local authority

J — Artificial juridical person

P — Person (Individual)

T — Trust (AOP)

• The fifth character of the PAN is the first character of either of the first name, surname or last name of the person
• in the case of a “personal” PAN card, where the fourth character is “P” or of the name of the entity, trust, society, or organisation in the case of a company/ [[Hindu joint family[HUF]]/ firm/ AOP/ trust / BOI / local authority / artificial judicial person/government, where the fourth character is “C”, “H”, “F”, “A”, “T”, “B”, “L”, “J”, “G”.
• The last (tenth) character is an alphabetic digit used as a check-sum to verify the validity of that current code.
• Therefore, the regular expression or ‘regex’, that corresponds to the pattern of a PAN number is represented as: [A-Z]{5}[0-9]{4}[A-Z]{1}.

PROVISIONS

In recent times, the DOI (date of issue) of the PAN Card is the mentioned at the right (vertical) hand side of the photo on the PAN card if issued by NSDL (now rebranded as Protean eGov Technologies Limited) and will not be mentioned if issued by UTI-TSL.

The central government has introduced a new online service called “Know Your PAN”, to know your PAN number, verify your PAN for new and existing PAN numbers. 

Failure to comply with the provisions of Section 139A of Income Tax Act, a penalty of ₹10,000/- for each default is payable u/s.272B to the assessing officer

USES OF Permanent Account Number (PAN)

The primary purpose of the PAN is to bring a universal identification to all financial transactions and to prevent tax evasion by keeping track of monetary transactions, especially those of high-net-worth individuals who can impact the economy. In Union Budget 2023, the government proposed to use PAN as a common identifier for all business establishments using digital systems of various government agencies. 

Quoting the PAN is mandatory when filing ITR, tax deduction at source, or any other communication with the Income Tax Department. PAN is also steadily becoming a mandatory document for opening a new bank account, a demat account, a new landline telephone connection / a mobile phone connection, purchase of foreign currency, bank deposits above ₹50,000, purchase and sale of immovable properties, vehicles etc.

OBTAINING Permanent Account Number (PAN)

Obtaining a PAN is optional or voluntary like a passport, driving licence, Aadhaar etc. However, its use is mandatory for conducting high-value financial transactions, etc.

One can apply for PAN by submitting the prescribed PAN application to the authorised PAN agency of the district or through online submission to NSDL, which is now rebranded as Protean eGov Technologies Limited, Website, UTIITSL along with 2 recent passport size colour photographs, proof of ID, Address and Date of Birth and fee. In case of re-print (re-issue), a photocopy of the old PAN is also required. It takes about 10–15 days to receive the card. 

A user with an Aadhaar card can also submit e-KYC.

PRESCRIBED PAN APPLICATION FORM

There are two types of PAN applications:

1.Application for allotment of PAN: This application should be used when the applicants do not have any PAN allotted to them. 

Form 49A: – To be filled by Indian Citizens  

2.FORM 49AA: – To be filled by foreign citizens. 

3.Application for new PAN Card or/and Changes or Corrections in PAN Data: – Those who have already have a PAN and wish to obtain the new PAN card or want to make some changes/corrections in their PAN data, are required to submit their applications in the following form prescribed by ITD:

REQUEST FOR NEW PAN CARD OR/AND CHANGES OR CORRECTION IN PAN DATA: – The same form can be used by Indians as well as foreign citizens for update of PAN data or Reprint of PAN Card. A new PAN card bearing the same PAN but updated information is issued to the applicant, in such a case. 

4.PAN allotment based on Aadhaar is free of cost. A PAN PDF will be generated and issued to the applicant, and holds the same validity as a physical PAN card.

5.The allocation date of a PAN can be checked through UTI’s official website

OPERATING MODEL

The issuance of PAN, verification, delivery and maintenance works on a public-private partnership (PPP) model like Passport Seva Kendra (PSK) for reasons of economy, efficiency, and effectiveness. The reputed entities like Protean eGov Technologies Limited (formerly NSDL e-Governance Infrastructure Limited)  and UTI Infrastructure Technology Services Limited (UTIITSL) have been entrusted by Income Tax Department as managed service providers for processing of applications, collecting, handling and verifying personal documents like proof of ID, age and address, clarification with the applicants, printing the card and the letter and then mailing it. The processing agencies obtain the new PAN number online from the server of the income tax department after successful processing of the application documents. Some critics in India may call the handling, processing, and delivery of personal ID and financial documents by private contractors a violation of privacy. 

Protean (formerly NSDL e-Gov) centres can be located at TIN website. It is now very easy to apply online using Aadhaar based eSignature at Protean’s (formerly NSDL e-Gov) website. One can register first at Protean’s website. After registration, the applicant receives a token number. One can continue with filling the form. The applicant can save the details and complete the form at his convenience by logging using his/her registered details. One can upload photo/signature and supporting documents and finally eSign the application using Aadhaar and OTP. After successful eSign one can download and keep a copy of the signed form for his reference. An acknowledgement receipt and form is also received through e-mail at registered email ID.

Permanent Account Number (PAN) FOR FOREIGN CITIZENS

PAN is an important document for foreign citizens also, who wish to undertake business in India or wish to invest in India. The procedure to obtain PAN is the same as applicable for Indian citizens. However, the application is required to be filed using Form 49AA meant for foreign citizens and submitted at any of the authorised PAN Service Centre through the authorised representative in India. 

Individuals and HUF

Documents accepted as proof of identity

1.Copy of passport, or Voter’s ID card

2.Copy of Person of Indian Origin (PIO) card issued by Government of India,

3.Copy of Overseas Citizen of India (OCI) card issued by Government of India,

4.Copy of other national or citizenship Identification Number or Taxpayer Identification Number duly attested by “Apostille” (in respect of countries which are signatories to the Hague Convention of 1961) or by the Indian Embassy or High Commission or Consulate in the country where the applicant is located or authorised officials of overseas branches of Scheduled Banks registered in India (in prescribed format).

Documents accepted as proof of address

1.Proof of identity documents mentioned above bearing the address of the applicant or

2.Copy of bank account statement in the country of residence, or

3.Copy of non-resident external (NRE) bank account statement in India, or

4.Copy of certificate of residence in India or residential permit issued by the state police authorities, or

5.Copy of registration certificate issued by the Foreigner’s Registration Office showing Indian address, or

6.Copy of visa granted and copy of appointment letter or contract from an Indian company and certificate (in original) of Indian address issued by the employer.

For other than individuals and HUF (including those having no office of their own in India)

Documents accepted as proof of identity and proof of address

1.Copy of certificate of registration issued in the country where the applicant is located, duly attested by “Apostille” (in respect of the countries which are signatories to the Hague Convention of 1961) or by the Indian Embassy or High Commission or Consulate in the country where the applicant is located or authorised officials of overseas branches of Scheduled Banks registered in India (in prescribed format); or

2.Copy of registration certificate issued in India or of approval granted to set up an office in India by Indian Authorities.

Although there are only 58 million income tax payers in India, yet there are 445 million genuine PANs issued as of 31 March 2019. While the alphanumeric PAN number is unique, individuals and corporate entities have been able to obtain multiple PAN cards fraudulently. It is illegal to obtain multiple PANs and there is a penalty of ₹10,000 (US$130) when caught. In addition, there are fake PAN cards due to ubiquitous plastic card printers. Additionally, illegal immigrants have also got PAN cards issued to them; most have used the services of PAN card agents

PAN is a ten-digit unique alphanumeric number issued by the Income Tax Department. PAN is issued in the form of a laminated plastic card as given below (commonly known as PAN card). PAN is issued in the form of a laminated plastic card as given below (commonly known as PAN card):

Now we shall discuss the structure of the ten characters of PAN. For this purpose we shall take an illustrative PAN as given below:

Utility of Permanent Account Number (PAN)

PAN enables the department to identify/ link all transactions of the PAN holder with the department. These transactions include tax payments, TDS/TCS credits, returns of income, specified transactions, correspondence etc., and so on. It facilitates easy retrieval of information of PAN holder and matching of various investments, borrowings and other business activities of PAN holder

Who has to obtain a PAN?

 PAN is to be obtained by:

• Every person if his total income or the total income of any other person in respect of which he is assessable during the year exceeds the maximum amount which is not chargeable to tax. 
• A charitable trust who is required to furnish return under Section 139(4A)
• Every person who is carrying on any business or profession whose total sale, turnover, or gross receipts are or is likely to exceed five lakh rupees in any year.
• Every person who intends to enter into specified financial transactions in which quoting of PAN is mandatory. 
• Every non-individual resident person and persons associated with them shall apply for PAN if the financial transaction entered into by them during the financial year exceeds Rs. 2, 50,000.

Transactions in which voting of Permanent Account Number (PAN) is mandatory 

Following are the transactions in which quoting of Permanent Account Number (PAN) is mandatory by every person except the Central Government, the State Governments and the Consular Offices:

• Sale or purchase of a motor vehicle or vehicle other than two wheeled vehicles. 
• Opening an account [other than a time-deposit referred at point No. 12 and a Basic Savings Bank Deposit Account] with a banking company or a co-operative bank 
• Making an application for the issue of a credit or debit card.
• Opening of a demat account with a depository, participant, custodian of securities or any other person with SEBI
• Payment in cash of an amount exceeding Rs. 50,000 to a hotel or restaurant against bill at any one time.
• Payment in cash of an amount exceeding Rs. 50,000 in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time.
• Payment of an amount exceeding Rs. 50,000 to a Mutual Fund for purchase of its units
• Payment of an amount exceeding Rs. 50,000 to a company or an institution for acquiring debentures or bonds issued by it.
• Payment of an amount exceeding Rs. 50,000 to the Reserve Bank of India for acquiring bonds issued by it.
• Deposits of cash exceeding Rs. 50,000 during any one day with a banking company or a co-operative bank. 10A) Deposits of cash aggregating to more than Rs. 2, 50,000 during the period of 09th November 2016 to 30th December 2016 with a banking company, cooperative bank or post office.
• Payment in cash for an amount exceeding Rs. 50,000 during any one day for purchase of bank drafts or pay orders or banker’s cheques from a banking company or a co-operative bank.
• A time deposit of amount exceeding Rs. 50,000 or aggregating to more than Rs. 5 lakh during a financial year with – 

1. A banking company or a co-operative bank 
2. A Post Office;
3. A Nidhi referred to in section 406 of the Companies Act, 2013 or
4. A non-banking financial company 

NOTE: 

1) Minor person can quote the PAN of his father or mother or guardian provided he does not have any income chargeable to income-tax. 

2) Any person, who does not have PAN and enters into any of the above transactions, can make a declaration in Form No.60. 

3) Quoting of PAN is not required by a non-resident in a transaction referred at point No. 3 or 5 or 6 or 9 or 11 or 13 or 18.

4) Any person who has an account (other than a time deposit referred at point no. 12 and a Basic Saving Bank Deposit Account) maintained with a banking company or a co-operative bank. He will be required to furnish his PAN or Form No.60 on or before 30-06-2017 if he has not quoted his PAN or furnished Form No. 60 at the time of opening of such account or subsequently.

How to apply for Permanent Account Number (PAN)

The Income Tax Department has authorised UTI Infrastructure Technology and Services Limited (UTIITSL) and National Securities Depository Limited (NSDL) [now protean] to set-up and manage PAN Service Centers. UTIITSL and NSDL [now protean] have established PAN Service Centers and TIN Facilitation Centers at various places in major cities of India (hereinafter referred to as PAN application centres of UTIITSL/Protean). 

Thus, a person wishing to obtain PAN can apply for PAN by submitting the PAN application form (Form 49A/49AA) along with the related documents and prescribed fees at the PAN application centre of UTIITSL or Protean. An online application can also be made from the website of UTIITSL or Protean.

As per Section 139AA, every person who is eligible to obtain Aadhaar is required to quote his Aadhaar number in the PAN application form with effect from 1st day of July, 2017. If any person does not possess the Aadhaar Number but he had applied for the Aadhaar card then he can quote the Enrolment ID of the Aadhaar application Form. 

However, the provisions of section 139AA shall not apply to an individual who does not possess the Aadhaar number or the Enrolment ID and is:- 

1. i) Residing in any of these States-Assam, Jammu and Kashmir and Meghalaya; 
2. ii) A non-resident as per the Income-tax Act, 1961; 

iii) Of the age of 80 years or more at any time during the previous year, i.e., super-senior citizen; 

1. iv) Not a citizen of India.

Hence, it will not be mandatory for an individual (as notified above) to quote his/her Aadhaar Number in the PAN application form. 

In case of an applicant, being a company which has not been registered under the Companies Act, 2013, the application for allotment of a Permanent Account Number may be made in Spice-INC-32 specified under sub-section (1) of section 7 of the said Act for incorporation of the company.

A resident person shall apply for PAN in form 49A and a non-resident person including a foreign company shall apply for allotment of PAN in form 49AA. 

Individual applicants will have to affix two recent, coloured photographs (Stamp size 3.5 cms x 2.5cms) on the PAN application form. 

Prescribed documents must be furnished as a proof of ‘Identity’ ‘Address’ and ‘Date of Birth’.

Designation and Code of concerned Assessing Office of Income Tax Department will have to be mentioned in the PAN application form.

The address, phone numbers, etc., of PAN application centres of UTIITSL or Protean at which PAN application can be submitted can be obtained from :

• Website of Income Tax Department: www.incometaxindia.gov.in 
• Website of UTIITSL: www.utiitsl.comWebsite of Protean: https://www.protean-tinpan.com/ Instant PAN Income-tax Dept. has launched a new functionality on the e-filing portal which allots a PAN to the assessee on basis of his Aadhaar Number.

This facility can be used by an assessee only if the following conditions are fulfilled: 

1. a) He has never been allotted a PAN; 
2. b) His mobile number is linked with his Aadhaar number; 
3. c) His complete date of birth is available on the Aadhaar card; and 
4. d) He should not be a minor on the date of application for PAN

How to correct any mistake in PAN card or intimate any change in data pertaining to Permanent Account Number (PAN)

Request for reissue of lost PAN card or for change/correction in PAN data is to be filed in “Request for New PAN Card or/ And Changes or Correction in PAN Data”.

• For Changes or Correction in PAN data, fill all mandatory fields of the Form and select the corresponding box on the left margin of the appropriate field where correction is required. 
• If the application is for re-issuance of a PAN card without any changes in PAN related data of the applicant, fill all fields in the Form but do not select any box on left margin.
• In case of either a request for Change or Correction in PAN or request for re-issuance of a PAN Card without any changes in PAN data, the address for communication will be updated in the ITD database using address for communication provided in the application.
• For Cancellation of PAN, fill all mandatory fields in the Form, enter PAN to be cancelled in the appropriate column of the Form and select the check box on the left margin. PAN to be cancelled should not be the same as PAN (the one currently used) mentioned at the top of the Form.

Holding of more than one PAN Card not allowed

A person cannot hold more than one PAN. A penalty of Rs. 10,000/- is liable to be imposed under section 272B of the Income-tax Act, 1961 for having more than one PAN.

If a person has been allotted more than one PAN then he should immediately surrender the additional PAN card(s).

Linking of Permanent Account Number (PAN) with Aadhaar Number

The Finance Act, 2017 had inserted a new section 139AA in the Income-tax Act, 1961, requiring every person who is eligible to obtain Aadhaar to quote his Aadhaar number while applying for PAN or furnishing return of income with effect from July 1, 2017. If any person does not possess the Aadhaar Number but he has applied for the Aadhaar card then he can quote the Enrolment ID of Aadhaar application Form in the ITR.

Section 139AA further provides that every person who has been allotted PAN as on the 1st day of July, 2017, and who is eligible to obtain an Aadhaar number shall intimate his Aadhaar number on or before 31-03-20221 to the Income-tax Department. In case of failure to intimate the Aadhaar number, PAN allotted to the person shall be made inoperative after the date so notified. The CBDT has notified that all the consequences provided under the Income-tax Act for not furnishing, intimating or quoting PAN shall come into effect from 01-07-2023 if PAN becomes inoperative due to non-linking of it with Aadhaar. However, the taxpayer is liable to pay a fee if PAN is linked with Aadhaar from 01-04-2022 to 30-06-2023.

Consequences for not linking Permanent Account Number (PAN) with Aadhaar Number

The Central Board of Direct Taxes has notified Rule 114 AAA prescribing the manner and consequences if PAN becomes inoperative. The Rule 114 AAA (3) provides that if PAN of a person become inoperative, then he shall be liable for the following consequences: 

1. Refund of any amount of tax or part thereof, due under the provisions of the Act shall not be made;
2. Interest shall not be payable on such refund for the period, beginning with the date when PAN become inoperative and ending with the date on which it becomes operative; 

III. Where tax is deductible under Chapter XVII B in case of such person, such tax shall be deducted at higher rate, in accordance with provisions of section 206AA;

1. Where tax is collectible at source under Chapter XVII-BB in case of such person, such tax shall be collected at higher rate, in accordance with provisions of section 206CC. 

However, the person can reactivate his PAN by subsequently intimating his Aadhaar to the Department.

Fee for default relating to intimation of Aadhaar number

The Finance Act, 2021 has inserted a new Section 234H to levy a fee for default in intimating the Aadhaar Number. If a person is required to intimate his Aadhaar under Section 139AA and such person fails to do so, he shall be liable to pay a fee, as may be prescribed, not exceeding Rs. 1,000 at the time of making such intimation. 

The CBDT vide notification No. 17/2022, dated 29-03-2022 has amended Rule 114 to prescribe the fees to be levied if Aadhaar is not linked with PAN. As per Rule 114(5A), if a person intimates his Aadhaar number after the due date, then he shall be liable to pay a fee of: 

1. a) 500, if such intimation is made between 01-04-2022 and 30-06-2022; and 
2. b) 1,000, in all other cases.

Penalty for not complying with provisions relating to Permanent Account Number (PAN) or Aadhar

Section 272B provides for penalty in case of default in complying with the provisions relating to PAN, i.e., failure to obtain, quote, or authenticate PAN. The amount of penalty shall be Rs. 10000 for each default. 

As the Finance (No. 2) Act, 2019 as provided for interchangeability of Aadhaar with PAN, Consequential amendments have been made in the penal provisions of Section 272B so as to levy a penalty of Rs. 10,000 for each default in the following cases: 

1. a) If assessee fails to quote or intimate his PAN or Aadhaar or quotes or intimates invalid PAN or Aadhaar. 
2. b) If assessee fails to quote or authenticate his PAN or Aadhaar in specified transactions.
3. c) If the receiver (i.e., banks, financial institution, etc.) of documents in respect of specified transactions fails to ensure that the PAN or Aadhaar are duly quoted and authenticated.

Income Tax Department (ITD) issues Permanent Account Number or PAN card an alphanumeric ID in a form of card to any “person” who applies for it or to whom the department allows the number without an application.

PAN enables the department to link all transactions of the “person” 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.