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Permanent Account Number (PAN)

A Permanent Account Number (PAN) is a unique 10-digit alphanumeric code issued by the Income Tax Department in a laminated card form.

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Permanent Account Number (PAN)

A Permanent Account Number (PAN) is a unique 10-digit alphanumeric code issued by the Income Tax Department on a laminated card. This number is permanent and does not change with address changes or tax officer reassignment. PAN is issued in collaboration with UTI Technology Services Ltd and National Securities Depository Ltd. To obtain a PAN, applicants must fill out Form No. 49A or 49AA (based on citizenship), along with required photos and documents. It’s mandatory for anyone subject to tax and for financial transactions in India.

PAN

Overview of the Permanent Account Number (PAN)

The Permanent Account Number (PAN) is an essential financial identifier in India, represented by a unique 10-digit alphanumeric code assigned by the Income Tax Department. This distinctive number is issued on a durable laminated card, designed to provide easy access and verification. One of the standout features of PAN is its permanence; the number remains unchanged regardless of any modifications to the PAN holder’s address or any shifts in their assigned Income Tax Officer. This stability ensures that individuals can rely on their PAN throughout their lifetime for various financial activities.

The issuance of PAN is facilitated through a partnership between the Income Tax Department and organizations like UTI Technology Services Ltd and the National Securities Depository Ltd. The application process for obtaining a PAN is quite straightforward. Applicants need to fill out a designated form—either Form No. 49A for Indian citizens or Form No. 49AA for foreign nationals. Along with the application, individuals must provide essential documents, including proof of identity, proof of address, and recent passport-sized photographs.

Statutory Requirement

Under the Income-tax Act of 1961, certain individuals—both residents and non-residents—have a statutory obligation to acquire and quote their PAN. The following points summarize these requirements:

  • Income Threshold: Individuals whose total income during any financial year exceeds the basic exemption limit as defined in the Income-tax Act must obtain a PAN.
  • Business Income: Anyone whose total sales or gross receipts from a business or profession are likely to exceed Rs. 5 lakhs in any previous year is required to obtain a PAN.
  • Prescribed Individuals: Other categories of individuals and entities specifically prescribed under the Income-tax Act are also obligated to acquire a PAN.
  • Non-Resident Taxation: Non-residents with any income on which tax has been deducted must provide their PAN to the person responsible for deducting the tax.

General Requirements

Quoting PAN or providing a copy of the PAN card is necessary for various significant transactions, including:

  • Filing Income Tax Returns: Individuals must quote their PAN when submitting their annual income tax returns or when making payments through challans.
  • Bank and Demat Accounts: PAN is required for opening bank accounts and dematerialized (Demat) accounts for trading in shares.
  • Investments: For investing in shares and securities, including Initial Public Offers (IPOs), Portfolio Investment Schemes (PIS), Portfolio Management Schemes, and Mutual Funds, quoting PAN is mandatory.
  • Real Estate Transactions: The sale or purchase of immovable property valued at Rs. 10 lakhs or more requires the disclosure of PAN.
  • Motor Vehicle Transactions: When buying or selling a motor vehicle, it is essential to provide PAN.
  • Tax Deduction for Non-Residents: Non-residents earning income on which tax has been deducted must provide their PAN to the entity responsible for the tax deduction.

FAQS

How is PAN issued?

PAN is issued in the form of a laminated card and is provided by the Income Tax Department in collaboration with UTI Technology Services Ltd and the National Securities Depository Ltd.

Is the PAN number permanent?

Yes, the PAN number is permanent and does not change even if the PAN holder changes their address or if there is a change in their assigned Income Tax Officer.

How can I apply for a PAN?

To apply for a PAN, you need to fill out Form No. 49A (for Indian citizens) or Form No. 49AA (for foreign nationals) and submit it along with required photographs and documents.

Who needs to obtain a PAN?

Every person who is assessable to tax or meets certain criteria under the Income-tax Act, 1961 is required to obtain a PAN.

What are the statutory requirements for obtaining a PAN?

Individuals must acquire a PAN if their total income exceeds the basic exemption limit or if their business sales or gross receipts exceed Rs. 5 lakhs in any previous year.

What if I lose my PAN card?

If you lose your PAN card, you can apply for a duplicate card by submitting an application to the Income Tax Department along with necessary documentation.

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