For the identification of every taxpayer in India, a ten-digit unique identification alphanumeric number (containing both alphabets and numbers) which is generally termed as PAN (Permanent Account Number) is assigned to all the residents paying tax. The PAN Card is a proof of identity that lasts for life long as it does not have a time limitation or renewal clause.
Let us get into detail and know each bit of PAN Card.
The department of Income Tax is the designated authority that allots each individual a PAN Card. And so, the ten-digit unique alphanumeric number is issued in the form of a laminated plastic card. It is a card containing all the details of an Individual like his or her name, date of birth (DOB), father or spouse’s name, and a photograph.
If you are a newcomer and looking to know how a PAN Card is applied and which all documents are required then continue reading and know yourself the detailed knowledge about PAN. In order to make all the people realize the importance of having a PAN, quoting the penalty for non-compliance of PAN in the beginning itself.
What if a person does not comply with the provision of applying for a PAN Card?
Penalty for Non-Compliance of PAN
The penalty attracted for non-applying for a PAN Card is Rs. 10,000 for each default. Also, as per the Finance Act 2019, for the clause of similarity of Aadhaar with PAN, certain amendments have been made in the penal provision of Section 272B in order to charge a penalty of Rs. 10,000 in the following cases:-
- If the assessee fails to quote or intimate his PAN or Aadhaar or quotes or intimates invalid PAN or Aadhaar.
- If the assessee fails to quote or authenticate his PAN or Aadhaar in specified transactions
- 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.
I hope no one would be ready to pay such a heavy amount of penalty for such a small reason. So, learn more to apply for a pan if not applied yet.
Now, you must be thinking that How to apply and from where to apply a PAN Card then here is the guide.
How to Apply a PAN Card?
There are two official government websites where the PAN card can be applied, namely:-
- NSDL https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html
- UTIITSL https://www.pan.utiitsl.com/
UTIITSL is basically a Government Company under Section 2 (45) of the Companies Act 2013. It is a portal where users can apply for New PAN Card, make corrections and download e-PAN as well.
Both the NSDL and UTIITSL are the companies that the Income Tax Department has authorized in order to set up and manage PAN Service Centers. Also, UTIITSL and NSDL have established PAN Service Centers and TIN Facilitation Centers at various places in major cities of India.
So, to apply PAN, PAN application form i.e. Form 49A/ 49AA along with the documents required and prescribed fees is necessary to be submitted at the PAN application center of UTIITSL or NSDL. Other way out is to simply apply for PAN Online.
Importance of PAN
PAN is considered as an important document. The reason being that the PAN is a unique alphanumeric number that is allotted by the department to identify/link all transactions of PAN holder with the department.
Who must have PAN Card?
As per Section 139AA, every person having an Aadhaar Card is required to obtain his or her Aadhaar number in the PAN application form w.e.f. 1st day of July 2017. Where the person does not possess Aadhaar Number however, has already applied for Aadhaar then he can mention his or her Enrollment ID of Aadhaar application form.
Structure of PAN
Let us take an example of this PAN : BLGPS XXXX R
BLGPS XXXX R
The first three characters (BLG) are the alphabets that can be anything ranging from AAA to ZZZ
Fourth character ( P) in the PAN represents the status of the PAN Card holder.
From the below mentioned alphabets, you can find any one of the alphabet as the fourth character. Let us know the what the 10 alphabets signify.
- (P) – this alphabet states that the user is an Individual
- (C) – stands for “Company”
- (H) – stand for “Hindu Undivided Family”
- (A) – stands for “Association of Persons”
- (B) – this alphabet stands for “Body of Individual”
- (G) – it indicated “Government Agency”
- (J) – this stands for “ Artificial Judicial Person”
- (L) – stands for “Local Authority”
- (F) – stands for “Firm/ Limited Liability Partnership”
- (T) – this alphabet stands for “Trust”
Now the fifth character if we talk about is divided into two parts. So, if the user is an Individual, then the PAN character shall denote the first character of the PAN holder’s last name/surname. Whereas in the case of a non-individual, the PAN holder’s fifth character represents the first character of the PAN holder’s name.
The next four characters are sequential numbers running from 00001 to 9999.
And the last character i.e. the tenth character is an alphabetic check digit.
Documents required for PAN Card
If you want to apply for a PAN, here are some of the documents required:-
- Aadhaar Card
- Voter Id Card
- Passport
- Individual applicants will need to affix two latest colored photographs (Stamp size 3.5 cms x
2.5. cms ) on the PAN application form.
- Address and Date of Birth required as “Proof of Identity”
Who cannot obtain PAN?
The provision of Section 139AA shall not apply to an individual who does not have an Aadhaar number or the Enrollment ID 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.
Points to be Noted
- It will not be considered mandatory for an individual to mention the Aadhaar Number in the PAN application form
- Where the user is a company that is unregistered under the Companies Act, the PAN application may be made in Spice INC-32 for incorporation of the company.
- A person being a resident of India shall file form 49A for applying for a PAN Card whereas if a person is a non-resident including a foreign company then, form 49AA shall be filed.