Date first issued 1972 | Issued by India | |
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Purpose Identification and Income Tax | ||
Permanent Account Number (PAN) is a code that acts as an identification for Indian nationals, especially those who pay Income Tax. It is a unique, 10-character alpha-numeric identifier, issued to all judicial entities identifiable under the Indian Income Tax Act, 1961. An example number would be in the form of ARLPA0061H. 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.
Contents
- Structure and provisions
- Use of PAN
- Obtaining PAN
- Prescribed PAN application forms
- Operating model
- PAN for Foreign Citizens
- Concerns with PAN Cards
- References
It is also issued to foreign nationals (such as investors) subject to a valid visa and hence, it is not acceptable as a proof of Indian citizenship.
The PAN is mandatory for a majority of financial transactions such as opening a bank account, receiving taxable salary or professional fees, sale or purchase of assets above specified limits etc.; especially high-value transactions.
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.
The PAN is unique to each individual and is valid for the life time of the holder, throughout India. An important point to note would be that once issued, the PAN is not affected by a change of address.
Structure and provisions
In recent times, the DOI (date of issue) of the PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card if issued by NSDL and will not be mentioned if issued by UTI-TSL.
The central government has introduced a new online service called "Know Your PAN" to verify or validate new and existing PAN numbers.
Failure to comply with the provisions of Section 139A of Income Tax Act, penalty of Rs. 10,000/- for each default is payable u/s.272B to the Assessing Officer.
Use of PAN
Quoting the PAN is mandatory when filing Income Tax returns, tax deduction at source, or any other communication with Income Tax Department. PAN is also steadily becoming a mandatory document for opening a new bank account, a new landline telephone connection / a mobile phone connection, purchase of foreign currency, bank deposits above Rs. 50,000/=, purchase and sale of immovable properties, vehicles etc.
Obtaining PAN
Obtaining PAN is optional and voluntary like passport, driving license, Aadhaar etc. However, its use is mandatory at required places, like PAN for high-value financial transactions, Driving License for motor driving, passport for foreign travel etc..
One can apply for PAN by submitting the prescribed PAN application to the authorized PAN agency of the district or through online submission to NSDL, UTI along with 2 recent passport size color 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.
Prescribed PAN application forms
There are two types of PAN applications:
- Application for allotment of PAN: - This application form should be used when the applicant has never applied for a PAN or does not have PAN allotted to him. Applicant may visit ITD’s website www.incometaxindia.gov.in to find whether a PAN has been allotted to him or not.
Following forms have been notified by ITD for submitting applications for allotment of new PAN:
FORM 49A: - To be filled by Indian citizens including those who are located outside India.
FORM 49AA: - To be filled by foreign citizens. - Application for new PAN Card or/and Changes or Corrections in PAN Data: - Those who have already obtained the 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 Indian as well as foreign citizens. A new PAN card bearing the same PAN but updated information is issued to applicant in such case.
Operating model
The issuance of PAN, verification, delivery and maintenance works on public private partnership (PPP) model like Passport Seva Kendra (PSK) for reasons of economy, efficiency and effectiveness. The reputed entities like NSDL e-Governance Infrastructure Limited (formerly National Securities Depository Limited) and UTI Infrastructure Technology Services Limited (UTIITSL) has 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 as violation of privacy.
One should avail services from the authorised PAN Centres established by NSDL e-Governance and UTIITSL which have been entrusted by the Income Tax Department.
NSDL e-Gov centres can be located at TIN website. It is now very easy to apply online using Aadhaar based eSignature at NSDL e-Gov's website. One can register first at NSDL e-Gov's website https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html. After registration, applicant receives a token number. One can continue with filling form. Applicant can save the details and complete the form at his convenience by logging using his/her registered details. Onefcan upload photo/signature and supporting documents and finally eSign the application using Aadhaar and OTP. After successful eSign one can download and keep copy of signed form for his reference. Acknowledgement receipt & form is also received through e-mail at registered email ID.
UTIITSL centres can be located at its website
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. Procedure to obtain PAN is same as applicable for Indian citizens. However, the application is required to be filled using Form 49AA meant for foreign citizens and submitted at any of the authorized PAN Service Centre through the authorized representative in India. List of documents applicable for foreign citizens are given below:
Individuals and HUF
Documents accepted as Proof of Identity
- Copy of passport, or Voter's ID card
- Copy of Person of Indian Origin (PIO) card issued by Government of India,
- Copy of Overseas Citizen of India (OCI) card issued by Government of India,
- 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
- Proof of Identity documents mentioned above bearing address of the applicant or
- Copy of Bank account statement in the country of residence, or
- Copy of Non-resident External (NRE) bank account statement in India, or
- Copy of Certificate of Residence in India or Residential permit issued by the State Police Authorities, or
- Copy of Registration certificate issued by the Foreigner's Registration Office showing Indian address, or
- Copy of Visa granted & Copy of appointment letter or contract from Indian Company & 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 & Proof of Address
- 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
- Copy of registration certificate issued in India or of approval granted to set up office in India by Indian Authorities.
At present, PAN Service Centres are located in India only. However, foreign citizens may find online mode of application more convenient when the klunky web user interface is working. The online facility allows payment of fees using credit card option for foreign citizens (but only if they have India based credit card as international credit cards are not always accepted by the third party fee collectors.) Unlike most countries, India charges a fee to issue a TIN (PAN ID). The fees charges are Rs. 107 if the PAN card is to be received in India and Rs. 989 if the PAN Card is to be received at a foreign location. Note that online application only eliminates data entry errors. One still needs to mail the application with photographs to India based centers. The application requires two photographs. One on the top right requires signature within the box below it. The other one on the top left requires signature across the photograph (such that part of signature is on the photograph and part on the form). There is anywhere from 2 to 20 days lag between your documents reaching the center and the initial processing/verification which only takes a day. The actual issue of PAN number by the tax department is within 48 hours. The actual PAN card is sent to the overseas address by the registered/certified mail and may take additional 2 weeks after the issue of the PAN number which is initially conveyed by email.
Concerns with PAN Cards
Although there are only 30 million income tax payers in India, yet there are 170 million genuine PANs issued as of 2014. 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$150) 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.
One should take due care to refrain from using services of tout agents who claim to provide hand delivery of PAN cards and charge extra. Also, there are certain sites that have proliferated on the web that provide online PAN service at additional charge. However, there are only two authorised entities who are also authorised to host online PAN application services on behalf of ITD, i.e. NSDL e-Governance & UTIITSL.