PAN stands for Permanent Account Number. It is a 10-character alphanumeric number assigned to the Pan Cardholder. It helps in identifying the PAN cardholder of income tax payer. Pan cards are required in the cased of receiving taxable salary, opening a bank account, purchase or sale of assets above the specified limit and so on.
Every person who is required to file ROI shall get himself registered with the Indian Revenue Authorities. On being registered, such a person is allotted an identification number, commonly known as, Permanent Account Number (PAN). It is issued under Sec 139A of Income Tax Act, 1961.
A set of documents is required to apply for the PAN Card. Application for PAN can be made either online or offline. There are two kinds of application forms: Form 49A and the other is for foreigners: 49AA. And the application can be made both for new applicant or correction/reprint of the exiting PAN Card.
Following is the list of documents that are required when you apply for PAN Card. You need to submit any one of document related to identity proof and the other document related to address proof. So, basically two documents are required.
Individual Applicant Copy of voter’s identity card, copy of Passport, copy of driving license, copy of Aadhar Card or any other photo identity card.
Company registered in India Certificate of Registration issued by the Registrar of Companies
Hindu Undivided Family (HUF) Affidavit issued by the head of HUF along with PIO/POA details. A declaration signed by the karta of the HUF, stating the father’s name, his/her name and the address proof.
Trust Certificate of Registration issued by Charity Commissioner, copy of deed of Trust
Firms/Partnerships Certificate of Registration issued by Registrar of firms and Partnership deed
Society Certificate of Registration Number issued by the Registrar of Co-operative society or Charity Commissioner
Foreigners Copy of passport, bank statement of the residential country, copy of NRE bank statement in India, copy of Person of Origin (POI) card issued by the Indian Government.
How to enrol for PAN?
You can rather apply online or offline.
1. When applying online, you need to visit the official site: NSDL/UTIITSL. Fill up the form and submit the form with processing fee. You will get your PAN Card in 15 days. You can track your card with given details.
2. When applying offline, you need to get the PAN application form from an authorized PAN centre. Fill up the details and submit it with the required documents with processing fee to the centre. You will receive your PAN Card within 15 days.
Structure of PAN Card
The structure of the PAN Card is as follows: AAAPL7896C. The first five characters of PAN are letters, followed by four numerals and again a letter. The first three characters are alphabets forming a sequence from AAA to ZZZ.
Mandatory Furnishing of PAN: Following are the cases where it is mandatory to furnish the PAN:
1. Sale/Purchase of motor vehicle (other than two-wheeler) which requires registration under Motor Vehicles Act,1988
2. When applying for debit or credit card
3. Payments to hotels and restaurants >=Rs.50,000 at any time
4. Payment in cash in connection with travel to foreign country or payment in foreign currency>Rs.50,000
5. Contract for sale/purchase of securities (other than shares) as defined in SCRA>Rs. 1,00,000 per transaction
6. Opening an account (other than deposit & saving a/c) with banks
7. Opening of DEMAT account with a depository participant, custodian of securities or any other person registered u/s 12(1A) of the SEBI Act, 1992.
8. Payment of life insurance premium to an insurer as defined in the Insurance Act, 1938 and if the amount is greater than Rs.50,000 in a financial year.
9. Sale/Purchase of shares of a company not listed in a recognized stock exchange with the amount being greater than Rs.1,00,000 per transaction
10. Deposits in cash with banking co./co-op bank Rs.50,000 during any one day
11. Payment>Rs.50,000 to mutual funds for purchase of units
12. Payment>Rs.50,000 to company/institution for acquiring debentures/bonds issued by it.
13. Payment> Rs.50,000 to RBI for acquiring bonds issued by it.
14. Sale/Purchase of immovable property> Rs.10,00,000 or for value adopted under Section 50C.
Filing of ITR
An individual is obligated to file an income-tax return if his gross taxable income during the particularly financial year exceeds the maximum amount which is not chargeable to tax. For a resident as well as non-resident individual whose income is up to Rs.2.5 lakh is not subjected to tax. For resident senior citizens (more than 60 years of age), threshold of total income is Rs.3 lakh and for resident super senior citizens (more than 80 years of age) it is Rs.5 lakh. As a resident and ordinary resident individual you may also have a tax return filing obligation irrespective of your income, if you own overseas assets.
Income-tax Return Forms
ITR-1: For individuals earning a salary, pension, or income from one house property or sources other than lottery with no losses to be carried forward and no foreign tax relief to be claimed. This form is not applicable if the total income of the individual is above Rs.50 lakh.
ITR-2: For those not having income from business or profession under any proprietary firms
ITR-3: For professional and business owner; individuals involved in speculative business.
ITR-4: For taxpayers having income assessed on presumptive basis.
If you fail to file ITR, you need to penalty as follows:
1. Interest @1% u/s 234A shall be recovered from you if you have any tax liability for the respective year unpaid and are filing a belated return.
2. Penalty amounting to Rs.5000/- u/s 271F may be imposed by the tax department if you fail to file your ITR timely.
3. Penalty of Rs.5000 might increase to Rs.10,000 if you fail to file till 31st December
Form 60 is a document to be filed by an individual or any person (not any company or firm) to carry out financial transactions that mandates quoting of PAN, under the two scenarios:
1. Concerned person does not have a PAN or have not applied for it
2. Concerned person has applied for PAN but allotment id pending
The following information required to be filled in Form 60:
1. Full address and name of the applicant
2. Particulars related to the transaction for which you are filling the Form60Full address and name of declarant
3. In case you are assessed to Income Tax, mention the details of the range or ward where you had filed the last return of income
4. You must state your reason for not having the PAN, if you have not applied for it or you are yet to receive it
Note: Any mismatch of the particulars with the supporting documents will lead to cancellation of the form and requires resubmission.
Form 15G and 15H
Form 15G and Form 15H are the forms that you can submit in order to make sure that TDS is nit deducted on your income if you meet the following conditions. Also, you must have a PAN card before applying for these forms. You can also submit these forms online.
Form 15H is for senior citizens, those who are older than 60 years of age and 15G is for others.
Conditions under which you can submit the Form 15G
1. The companies or firms cannot submit this form. This form is only for the individuals, HUF, Trust or Society.
2. You must be a resident Indian
3. You must be less than 60 years of age
4. Tax calculated on your income should be NIL
5. The total interest income for the year should be less than the basic exemption limit of that year.
Conditions under which you can submit the Form 15H
1. You should be an individual
2. You must be a Resident Indian
3. You must be a senior citizen, i.e., more than 60 years of age
4. Tax calculated on your total income should ne NIL
Form 15G and Form 15H are valid for only one financial year. So, if you are eligible you will have to submit this form every year. Submitting the form as soon as the financial year starts will ensure the bank does not deduct any TDS on your interest income.