What Is a PAN Card & Why Do You Need It?

Is PAN Card free of cost and more details

If you're a homemaker, student, or a business professional, often you must have had this thought- Do I need a PAN Card? Or are there going to be any specific circumstances, situations, or transactions in the future where the PAN Card will be mandatory?

Let us understand the A to Z conditions and events where a PAN card is needed to proceed forward. Any individual having an income or receiving a lump sum amount that's not included under the Indian tax banner that is Rs. 50,000 isn't mandated to apply for a PAN Card. Any amount exceeding this shall be liable to pay Income Tax by Law.

What Is PAN Card?

PAN Card or Permanent Account Number is a 10-digit alphanumeric identity issued by the Income Tax Department of India to every individual applying for it. Your PAN number will remain unchanged and unaffected by the change of address throughout India.

It is mandatory for major and minor financial transactions on a day to day basis. According to Section 139A of the Income Tax Act, 1961, a PAN card is obligatory for any individual whose-

1. Total income has exceeded in the previous year from the given limit under the Act i.e 5 Lakh Rupees.
2. Having a business whose gross annual turnover has crossed the threshold of the above limit.
3. Wants to file Income Tax Returns under the Sub-Section (4A) of Section 139.
4. Any NRI or resident entering into a transaction that crosses over 2,50,000 rupees during the financial year.
5. Anybody who is a- Managing Director, Chairman, Trustee, Partner, CEO, Office bearer, and Principal officer is bound to apply for a PAN Card.

Do I Need a PAN Card?

According to Section 114B of the Income Tax Act, there are specific instances or cases in which you will have to present your PAN Card. For example:

• If you want to purchase a car or any other motor vehicle apart from 2 wheelers including Auto Rickshaws.
• If you want to buy an immovable property i.e bungalow or apartment, shop, or office whose value is above 10 Lakh rupees. It could be- Transaction Value or Stamp Duty Value.
• If you want to open a Bank Account.
• If you want to apply for a Credit Card.
• Involved in the purchase or sale of Goods & Services, whose single transaction value crosses 2 Lakh rupees.
• If you're traveling internationally and spending more than 50,000 rupees that include- Ticket booking, foreign currency exchange, or paying via cash.
• If you are depositing over 50,000 INR during a single transaction in cash.
• While paying Life Insurance Premiums over 50K.
• If you want to start a Fixed Deposit under any Cooperative Bank whose one-time transaction value is 50,000 or yearly value is over 5,00,000 rupees.
• During the purchase of Mutual Funds, Bonds, Debentures, RBI Bonds, Cash Card, or any other instrument whose value exceeds 50,000 rupees.
• Purchasing/Investing in any Security or Unlisted Company Shares whose value exceeds 1 Lakh rupees.
• If you are acquiring premium jewellery items whose costing exceeds over 5,00,000 rupees.
• If you are a salaried employee of any company or organisation, the company acquires your PAN Card for- proficient assessment, TDS (Tax Deducted at Source), and other tax collection purposes or recording government forms.

Is It Mandatory To Have a PAN Card For Finance/Business?

PAN is mandatory for several financial transactions such as-

1. Receiving a taxable payroll.
2. Professional Fees.
3. Sale or Purchase of Assets.
4. Keep track of financial transactions in a business.
5. Have a taxable element to prevent Tax Evasion.

What is PAN and its Features?

Some of the main features of PAN Card that separates it from other documents of identification needed in India are-

• An official legit document issued by the Government of India & ITD.
• PAN Card validity is for a lifetime, and no renewal is needed.
• Can be obtained by Indians and Foreign individuals.
• Needed to pay GST and file Tax returns.
• Needed to handle Direct taxes.

Advantages Of PAN Card

There are numerous benefits of having a PAN Card like-

1. Tax Deductions
2. Starting and Running a business
3. Claiming Tax refunds
4. Buying and Selling of immovable assets
5. Opening Bank & Demat Accounts
6. Official Government Approved ID Proof
7. International/Overseas Traveling
8. Time Deposits
9. Restaurant & Hotel Bill
10. IT Returns filing or ITR
11. Pay Orders, Bankers Cheque & other Bank Drafts.
12. Available easily to individuals above 18 years of age.

Types Of PAN Cards In India

Generally, 3 types of PAN Card is issued in India like-

• PAN Card for Individuals- Issued per person to keep track of every financial transaction.
• PAN Card for Businesses- It comes without any picture, and in the place of birth you will find the registration date of the company.
• PAN Card for Non-Residential Indians- Issued with similar rules like Indian citizens, except for filing where you have to fill Form 49AA instead of 49A.

How To Apply for a PAN Card Online?

To get your Pan card via the internet, all you need is your set of documents, basic background information and upload them to the official website of TIN-NSDL. For the PAN Card apply online method, you just have to follow the simple steps given below:

Step 1- Visit the official website of TIN-NSDL and click on the PAN section.

Step 2- Then Click on Services to begin your online application.

Step 3- Fill your 49A Form which includes- Full name, Date of Birth, and other contact details.

Step 4- Click on your CAPTCHA code and then click Submit.

Step 5- On the next page, you will receive 3 options to record your documents with either- Submit digitally through e-KYC & e-Sign(paperless), submit scanned images through e-Sign, or forward documents physically.

Step 6- After selecting your Document procedure, click on Next.

Step 7- Fill in your further details- Source of Income, Address for Communication, and Residential address information.

Step 8- In this step, you will need your AO (Assessing Officer) to assess the tax administration you suit for. After filing click Next.

Step 9- This final step needs your document information submitted for address, and date of birth. You will also have to upload your photograph and digital signature for verification. Fill it and click Submit.

Step 10- After submitting your information and completing the payment process you will receive an OTP on your number linked to Aadhar card. After entering the One Time Password, print the 15-digit acknowledgment receipt.

Step 11- Sign the copy and send it to the NSDL office via post or courier within 15 days of applying online.

What Are The Documents Required For a PAN Card?

• If you are an individual or Sole Proprietor you need- Driving License, Voter ID, Passport, Aadhar card, Ration card, any government ID card with photograph, latest electricity bill, bank account, or credit card statement.
• If the Applicant is in a partnership- Partnership Deed.
• If the Applicant is NRI- Passport Copy, Indian Origin Card, Overseas Citizenship of India Card.
• If the Applicant is LLP, International firms, or a Company- Apostille attested Certificate of Registration, or approval copy granted for setting up an office in India.
  The fee for PAN Card in India is 93 Rupees excluding GST and Rs. 864 for International or foreign individuals.

How To Find Pan Card Number?

1. Step 1- Login with your credentials to the official Income Tax Department website.
2. Step 2- Click on Register yourself.
3. Step 3- Enter the PAN number.
4. Step 4- You will receive an activation email on your registered account.
5. Step 5- Navigate to My Account and click on Profile Settings.
6. Step 6- Under this section, click on PAN details.
7. Step 7- All details including- Area Code, Address, Jurisdiction, Name, and other details will be displayed on your screen.

How To Check PAN Card Status?

1. Step 1- Go to the official website of the Income Tax E-filing and login with your credentials.
2. Step 2- Enter the following details- PAN Number, Date of Birth, and Full Name.
3. Step 3- Next, select your applicable Status.
4. Step 4- Enter your CAPTCHA and verify your details.
5. Step 5- Click on Submit and the next screen appears declaring- “Your PAN is Active and the details are matching with PAN Database”.
6. You can also inquire about your status by calling on 020-27218080 and track your PAN card.

How To Link Aadhaar With PAN Card?

Step 1- Login with your credentials to the official Income Tax Department website.

Step 2- Navigate to your Account and click on Profile Settings.

Step 3- Select the Option of Link Aadhaar.

Step 4- The Status of Linking will be displayed on the next screen.

How To Apply For PAN Card Offline?

You can submit your online printed form and send it to-

INCOME TAX PAN SERVICES UNIT (Managed by NSDL e-Governance Infrastructure Limited), 5th floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune – 411016.

How To Get Pan Card Instantly?

• Generally, you can generate a virtual PAN Card via the Income Tax Department website with the help of your Aadhaar Card and the OTP generated on your registered mobile number.
• Otherwise, the main procedure of obtaining a physical copy takes up to 15 days.
• You can also opt for TATKAL PAN, where you can get your card in 5 days.

WARNING

Even though the PAN Card is unique, legitimate, and authentic many entities plus corporations have mistreated it fraudulently. It is an illegal step to use multiple PAN Cards and levies a heavy penalty of 10,000 rupees when caught.

Must read - Pan Card Updates in India

• Always fill your details with Black Ink and do it in BLOCK LETTERS.
• Provide authentic AO Codes.
• Do not miss the landmark in the address.
• Don't write an incomplete Pin code.
• Attach the latest passport size photograph (no less than 6 months).
• Do not overwrite or correct a physical form as it will increase your chances of rejection.
• Only add active phone numbers and email addresses.

Also read:
Digitalisation - The next step in the evolution of Digital India
How To Do Planning & Manage An Online Business?