A Detailed Guide for Indian and Foreign Nationals Applying for a PAN Card

Indian nationals who pay their Income Tax have their own Permanent Account Number (PAN). This 10-digit alphanumeric code is assigned by the Central Board of Direct Taxes through the Income Tax Department and is unique for every taxpayer. Basically, it serves as an identity proof to all individuals covered by the Indian Income Tax Act of 1961.

Obtaining a PAN is optional and voluntary, just like passport and driving license. But while it is voluntary, its use is mandatory in almost all high-value financial transactions throughout India. If you are undecided whether to obtain one or not, imagine yourself applying for a driver’s license for motor driving or applying for a passport so you can travel abroad. It is impossible for you to carry out such transactions without a PAN.

In India, applying for a PAN card is necessary because almost all financial transactions–including opening a bank account, buying mutual funds, selling or purchasing assets ababove-identifiedimits, receiving taxable salary or professional fees, and other high-value transactions–require PAN.  This number keeps track of all your monetary transactions and helps prevent you from being charged with tax evasion. Regardless of how many times you change your address while in India, your PAN remains unchanged.

Through time, the PAN has steadily become a mandatory document for many other financial transactions, from the smallest like applying for a new landline telephone or mobile phone connection to the biggest like purchasing and selling properties and purchasing foreign currency. Its general uses include payment of direct taxes, filing of income tax returns, avoiding deduction of tax at higher rates, and entering into specific transactions like the following:

  • Selling or purchasing immovable properties like house, apartment or a piece of land worth 5 lakh rupees and above
  • Selling or purchasing vehicles
  • Paying hotels or restaurants an amount more than 25,000 rupees
  • Paying in cash worth at least 25,000 rupees when traveling in other countries
  • Paying an amount of 50,000 rupees or more when acquiring bonds from the Reserve Bank of India
  • Paying an amount of 50,000 rupees or more when acquiring bonds or debentures from a company or an institution
  • Paying an amount of 50,000 or more when acquiring shares from a company
  • Purchasing mutual funds
  • Depositing 50,000 rupees from any single banking institution in 24 hours
  • Paying for bullion and jewelry worth more than 5 lakh rupees

What is the structure of PAN?

As mentioned, a PAN is an alphanumeric code and therefore consists of both letters and numbers. Its first five characters are letters, the next four are sequential numbers running from 0001 to 9999, and the last character is a letter. Hence, it follows this structure: AAAPL 1234C.

The first three letters of your PAN are a sequence of letters from AAA to ZZZ. However, the fourth letter stands for something else. This character tells which type of card holder you are. It uses letters A to K, which individually stands for:

  • Association of Persons (AOP)
  • Body of Individuals (BOI)
  • Company

F-    Firm

G-   Government

H-   Hindu Undivided Family

L-   Local Authority

J-   Artificial Juridical Person

P-   Individual

T-   AOP (Trust)

K-   Krish (Trust Kish)

The fifth character of your PAN is the first character of your surname, if the PAN card is “Personal” where the fourth character is “P,”  or the first character of the name of the entity, trust, society or organization in the case of company/ HUF/ firm/ AOP/ BOI/ local authority/ artificial juridical person or government, where the fourth character is “C,” “H,” “F,” “A,” “T,” “B,” “L,” J,” and “G.”  The last character is an alphabetic check digit.

The date of issue of the PAN card is indicated at the right-hand side of the card holder’s photo on the PAN card. However, this is only for PAN cards issued by the NSDL. Those issued by UTI-TSL do not indicate the card’s date of issue. The central government of India has also taken strides to introduce an online service, “Know Your PAN,” should you wish to verify or validate either your new or existing PAN number.

Who can apply for a PAN card?

Whether you are employed or unemployed, a plain housewife or someone in a non-financial position, you are free to apply for a PAN card. Practically every Indian national faces no restriction against applying for it and there is no disadvantage to having one. In fact, obtaining a PAN card will help you avoid transactional problems that may arise in the future. Take it this way: When you obtain a driver’s license, it does not necessarily mean that you are required to drive. However, in the event that you need to drive, it is mandatory for you to have a driver’s license.

Now, who are the specific people who can apply for this card? If you belong to any of these two, then you can have your own PAN card:

  • Anyone who earns a taxable income in India.
  • Anyone who manages a retail, service or consultancy business that had total sales or gross receipt of more than 5 lakh rupees in the previous financial year.

What if I am a foreign citizen? Can I apply for a PAN card?

If you are a foreign citizen and you want to run a business or invest in India, you should also apply for a PAN card. Foreign nationals undergo the same procedure as Indian nationals when it comes to obtaining PAN. The only difference is that the application of a foreign citizen should be filled using Form 49AA, which is especially intended for foreign citizens. The completely filled-out form should be submitted to an authorized PAN Service Centre through the foreign applicant’s authorized representative based in India.

Currently, PAN Service Centres are only located in India but foreign PAN applicants can apply online. The online facility allows foreign applicants to pay their fees using their credit card, but only if they have India-based credit cards.

Since PAN is also available to foreign nationals, this document cannot be used as proof of Indian citizenship.

I want to apply for a PAN card. How do I get started?

First, you have to understand that PAN applications are categorized into two:

  1. Application for allotment of PAN- If you have never applied for a PAN before or if you do not have a PAN allotted to you yet, this is for you. You may visit India’s Income Tax Department website to verify whether a PAN has already been assigned to you or not.

Once you have checked it with the ITD and confirmed that you do not have an existing PAN yet, you may proceed with your application process by downloading either of the following forms:

  1. Form 49A- If you are an Indian citizen, whether or not you are currently located in or outside India or Form 49AA- If you are a foreign citizen
  1. Application for new PAN Card or/and Changes or Corrections in PAN data- If you have already obtained a PAN but wish to have a new PAN card, or if you want some corrections applied in your PAN data, you need to submit your application by filling out the “Request for New Pan Card or/and Changes or Correction in PAN Data” form. This form can be used by both Indian nationals and foreign nationals.

I already have the application form. What’s next?

If you have already secured the necessary form/s, follow these steps:

  • Fill in the details on the form. Remember that all the mandatory information should be provided and only one letter should be entered in each box. All fields marked (*) are mandatory. Words should be separated with a blank.
  • Once you have filled out the form and submitted the application successfully, the screen will display a 15-digit unique acknowledgement number. Keep this number as you will need this when you go to the Income Tax department.
  • Aside from the application form, you also need to fill out an acknowledgement form, where you will attach two (2) of your recent photographs with white background. The photos should not be stapled or clipped to the form in any way. Remember that the clarity of the image on your PAN card will greatly depend on the quality of the photo that you will affix to your acknowledgement form. Also, do not forget to cross-sign on the photo on the left side in such a way that a portion of your signature is on the photo and another portion is on the form.

If you are applying for a PAN card on behalf of a company, the one to sign the acknowledgment is the authorized signatory. Make sure to affix the appropriate stamp and seal.

  • As soon as you have accomplished the acknowledgment form, submit it along with the other documents to the NSDL office in Pune within 15 days of the date of your online application. When you send it to the Income Tax department, do not forget to attach a proof of address, proof of identity and the payment receipt. Place all the required documents inside an envelope and write “APPLICATION FOR PAN–ACKNOWLEDGEMENT NUMBER” on the packet.

You can also submit the required documents online through the following websites:

https://tin.tin.nsdl.com/pantan/StatusTrack.html

https://www.utiitsl.com/UTIITSL_SITE/

  • To apply for a PAN card, you need to pay a processing fee. If your address is in India, the fee is Rs. 107. If your address is outside India, the amount that you need to pay is Rs. 989. The payment channels are the same whether your address is within our outside India. You can pay via online net banking, check, debit card or demand draft.

Which documents can I use as proof of identity and address?

Proof of Identity:

  1. Copy of passport
  2. Copy of Person of Indian Origin card
  3. Copy of Overseas Citizenship of India card
  4. Copy of Taxpayer Identification Number (TIN)

Proof of Address:

  1. Copy of passport
  2. Copy of Person of Indian Origin card issued by the Indian Government
  3. Copy of Overseas Citizenship of India card issued by the Indian Government
  4. Copy of Taxpayer Identification Number (TIN) or Citizenship Identification Number attested by Apostille or by the Indian Embassy or Consulate in the applicant’s country of origin
  5. Copy of bank account statement from country of residence
  6. Copy of non-resident external bank account statement in India
  7. Copy of residential permit in India issued by the State Policy Authority
  8. Copy of registration certificate issued by the Foreigner’s Registration Office bearing the applicant’s Indian address
  9. Copy of granted visa/ appointment letter/ contract from Indian company and original certificate of Indian Address issued by the employer

Can I have multiple PANs?

If you have already been assigned your 10-digit alphanumeric PAN, do not apply for a new number as that is illegal. If you have lost your card, you can apply for a new one given that you will use the same PAN number. Should there be a need for some corrections on your existing PAN card, you can always request for a new one by paying the required fee.

How will I know the status of my application?

It usually takes 10 to 15 days to receive a PAN card from the day of application. However, the process is shorter when the application is made online. If you applied through the Internet and paid your fee through a credit card, you can get your card after five (5) days.

If you want to check the status of your PAN card application, you can visit the NSDL website three (3) days after filing your application. You are required to give your acknowledgment no. or your name and date of birth in the portal before you can view the status of your application. Go to this link to track your application status online:

https://tin.tin.nsdl.com/pantan/StatusTrack.html

You can also check your application status by typing NSDL PAN followed by your 15-digit acknowledgement number and sending it to 57575.