PAN – Permanent Account Number is a unique 10 digit number given by the Income Tax department to every entity (whether individual/company/others). It is one of the most primary and important proof of identification for any Entity (entity is as defined under the Income Tax Act of India 1961). A PAN is mandatory to file income tax returns.
PAN is basically unique identification number used to track financial transactions and to aid in avoiding tax evasion in monetary transactions. Getting a PAN is optional however certain instances mandate the requirement of PAN (eg: While filing returns, TDS etc). Two separate entities cannot have the same PAN. Also one entity cannot have multiple PAN’s.
How to apply for PAN?
PAN can be applied either Online or Offline. The form to be filled for PAN application is Form 49A (49AA in case of foreigner)
The charges for applying for PAN is Rs. 93 (Excluding Goods and Services tax?) for Indian communication address and Rs. 864 (Excluding Goods and Services tax) for foreign communication address. Payment of application fee can be made through credit/debit card, demand draft or net-banking. Once the application and payment is accepted, the applicant is required to send the supporting documents through courier/post to NSDL/UTITSL. Only after the receipt of the documents, PAN application would be processed by NSDL/UTITSL.
PAN requires two types of documents – Proof of Identity and Proof of Address and two recent colour photographs. Individuals are also required to submit proof of Date of birth and the name on PAN should match the proof.
Time limit for issue of new PAN – Once the form and documents are sent and are in order the PAN is issued within 48 hours but the physical card may take upto 2 weeks time.
Know your PAN:
Did you know every PAN is a 10 digit alphanumeric unique number.
The first five digits are alphabets, then 4 numbers and the last digit is a alphabet. (format : ABCDE1234F)
4th letter/digit - The fourth digit (alphabet) is to identify the type of entity, for eg:
P – Individual
F – Firm
C – Company
A – Association of Person
G – Government
B – Body of Individuals
E – LLP
H – HUF
T – Trust
5th letter/digit – The fifth digit in a PAN is an alphabet which is the 1st letter in the surname (last name) in case of PAN of an Individual or the First letter in the name in case of other entities like company/firm etc.