PAN Card: An Important National ID

PAN Card is an important national ID issued by the Income Tax Department of India to any "person" who applies for it or to whom the department allots the number without an application. This is a laminated card which contains Person's Name, Father's Name, Date of Birth, Permanent Account Number, Signature, Photograph and Date of issue of PAN Card. 

PAN enables the department to link all transactions of the "person" with the department. These transactions include tax payments, TDS/ TCS credits, returns of income/ wealth/ gift /FBT, specified transactions, correspondence, and so on. PAN, thus, acts as an identifier for the "person" with the tax department. PAN was introduced to facilitates linking of various documents, including payment of taxes, assessment, tax demand, tax arrears etc. relating to an assessee, to facilitate easy retrieval of information and to facilitate matching of information relating to investment, raising of loans and other business activities of taxpayers collected through various sources, both internal as well as external, for detecting and combating tax evasion and widening of tax base.

It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. From 1 January 2005 it is mandatory to quote PAN on challans for any payments due to Income Tax Department. It is also compulsory to quote PAN in all documents pertaining to the following financial transactions:-

• ·  Sale or purchase of any immovable property valued at Rs.5,00,000/- or more;

• ·  Sale or purchase of a motor vehicle or vehicle, [the sale or purchase of a motor vehicle or vehicle does not include two wheeled vehicles, inclusive of any detachable side-car having an extra wheel, attached to the motor vehicle]

• · Opening any type of bank account or a Demat Account.

• ·   A time deposit, exceeding Rs. 50,000/- with a banking company.

• · A deposit in cash amounting to Rs.50,000/- or more during any one day, in any account with Post Office Savings Bank or a bank.

• · A contract of a value exceeding Rs.1,00,000/- for sale or purchase of securities.

• ·   Making an application for installation of a telephone connection (including a cellular telephone connection).

• ·  Payment to hotels and restaurants against their bills for an amount exceeding Rs.25,000/- at any one time;

• · Payment in cash for purchase of bank drafts or pay orders or banker's cheques for an amount aggregating Rs.50,000/- or more during any one day;

• ·  Payment in cash in connection with travel to any foreign country of an amount exceeding Rs.25,000/- at any one time.

 

Now what is this PAN, what does this alpha numeric ten letter mean:-

• ·         The first three characters are alphabetic series running from AAA to ZZZ

• ·         The fourth character of PAN represents the status of the assessee

• ·         The fifth letter is the first character of the PAN holders name

• ·         The next four character are sequential numbers running from 0001 to 9999

• The last character in the PAN is an alphabetic check digit.

 

 

• In order to improve PAN related services, the Income Tax department has authorized UTI Investor Services Ltd (UTIISL) to set up and manage IT PAN Service Centers in all cities or towns where there is an Income Tax office and National Securities Depository Limited (NSDL) to dispense PAN services from TIN Facilitation Centers. For convenience of PAN applicants in big cities, UTIISL has set up more than one IT PAN Service Center and likewise there are more than one TIN Facilitation Centers.
  
  
  PAN application should be made only on Form 49A. A PAN application (Form 49A) can be downloaded from the website of Income Tax department or UTIISL or NSDL (www.incometaxindia.gov.in,www.utiisl.co.in or tin.nsdl.com) or printed by local printers or photocopied (on A4 size 70 GSM paper) or obtained from any other source. The form is also available at IT PAN Service centers and TIN Facilitation centers
  
  
  What documents and information have to be submitted along with the application for Form 49A?
  a)      Individual applicants will have to affix two recent, coloured photograph (Preferably Stamp Size: 3.5 cms x 2.5 cms) on Form 49A;
  b)      Any one document listed in Rule 114 must be supplied as proof of 'Identity' and 'Address'; and
  c)      Designation and code of the concerned Assessing Officer of Income Tax department will have to be mentioned in Form 49A.
  Copy of school leaving certificate or matriculation certificate or degree of a recognized educational institution or depository account or credit card or bank account or water bill or ration card or property tax assessment order or passport or voter identity card or driving license or certificate of identity signed by a MP or an MLA or a Municipal Councilor or a Gazetted Officer;
  In case the PAN applicant is a minor, any of above documents of any of the parents or guardian of such minor shall serve as proof of Identity;
  Assessing Officer code may be obtained from Income Tax Office where you submit your return of income. Applicants who have never filed return of income may find out Assessing Officer code with the help of IT PAN Service Center or TIN Facilitation Center or jurisdictional Income Tax Office.
  
  
  If you don’t have a permanent account number (PAN), be prepared for paying higher income tax at source from the next fiscal. According to a government notification, “Tax at higher of the prescribed rate or 20% will be deducted on all transactions liable to TDS, where the PAN of the deductee is not available,” and the new provision will become applicable with effect from 1^st April 2010
  All assessees will have to quote their PAN in their correspondences, bills, vouchers and other documents sent to each other. The finance ministry notification said all deductors should intimate their deductees to obtain and furnish their PAN so as to avoid TDS at a higher rate. Also, all non-residents in respect of payments or remittances liable to TDS will comply with the new norm. “All deductees, including non-residents having transactions in India liable to TDS, are advised to obtain PAN by 31^st March 2010 and communicate the same to their deductors before tax is actually deducted on transactions after that date,” the ministry said.
  Assessees who do not have PAN will also not get certificate from assessing officer about lower or no tax liability.
  
  
  PAN is an important national ID card can easily be obtained, easy to replace if lost or damaged can easily be carried in your valet and produced for identification. Apply for your PAN today and be a proud Indian.
  
  
  Jai Hind!