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 a 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 about 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. You can't carry out such transactions without a PAN.
In India, applying for a PAN card is necessary because of almost all financial transactions–including opening a bank account, buying mutual funds, selling or purchasing assets above-identified limits, 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:
What is the structure of the 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:
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 the 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.
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, if you need to drive, you must 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:
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.
First, you have to understand that PAN applications are categorized into two:
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:
If you have already secured the necessary form/s, follow these steps:
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.
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/
Proof of Identity:
Proof of Address:
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 a new one by paying the required fee.
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 acknowledgment number and sending it to 57575.
