PAN

What is Permanent Account Number (PAN)?

Ans.

PAN is a ten-digit alphanumeric unique identification number, issued by the Income Tax Department of India.  It is PERMANENT, and the number will remain the same even if change of address of the PAN holder or change of Income Tax Assessing Officer. The Income Tax Department issues PAN in partnership with UTI Technology Services Ltd and National Securities Depository Ltd.

PAN is mandatory for transacting in financial markets in India. PAN enables the Department to link all transactions of the “person” with the Department. These transactions include tax payments, TDS/TCS credits, return of Income / wealth / gift, specified transactions, correspondence and so on. PAN, thus, acts as an identifier for the “person” with the Department.

What procedure should be followed to apply for a PAN?

Ans.

PAN application can be made online/ manually in paper in prescribed form along with required proof of identity, address and passport size photographs to the PAN Authority. 

Further, in case of NRIs, there may be certain unique situations where documents may need attestation by the Indian Embassy / Consulate / High Commission / Apostille. In certain cases, an Individual can digitally sign the PAN application form by using a DSC.

What is the general timeframe to obtain PAN card?

Ans. An applicant usually receives the physical PAN card within 25-40 working days (depending on whether in India or outside India) from the date of submission of application to the PAN authority. However, allotment of a PAN number is received within 10-12 working days from submission. 

Is there any expedited / TATKAL facility available for PAN?

Ans. No such facility is available at this time.

Are there any transactions that require mandatory allotment / quoting of PAN?

Ans.

PAN is required for executing many transactions in India, for example:
• Opening a Bank Account, Time Deposit, Demat Account
• Filing Tax Returns, challans for payment of tax, etc.
• Investing in shares, securities, mutual funds etc.
• Sale or Purchase of immovable property exceeding Rs.10 lakhs
• Sale or purchase of a motor vehicle or vehicle
• Payment of Life insurance exceeding Rs. 50,000/-.
• Payment exceeding Rs. 50,000/- (in cash) in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time.
• Sale or purchase, by any person, of goods or services of any nature of an amount exceeding Rs. 2.50 lakh per transaction.

A NRI does not hold PAN in India. He has income from various sources in India, which yield an annual income of Rs. 1 lakh. Are there any adverse consequences of not holding a PAN?

Ans.

In case NRI does not hold PAN in India, his income may be subject to TDS at higher of the following rates:

1. 20%; or
2. Rate of TDS actually to be deducted i.e. 10% (DTAA rate for interest income in certain countries) or 15% (certain Short Term Capital Gains) or 30% (other incomes) etc.

However, Finance Act, 2016; has provided an exemption from above rule, if NRI provides the following details to AD Bank/ Payer:
1. Name, E-mail ID, contact number;
2. Address in the country of which he is a resident;
3. Tax Residency Certificate;
4. Tax Identification Number of Deductee in the country of his / her residence

The above procedure and requirements may differ as per AD Bank’s internal guidelines.

Is minor allowed to hold a PAN card?

Ans. Yes, minor can hold PAN card. The minor will have to apply through a Representative Assessee and will to submit additional documents along with the PAN application form. Further, photograph of minor shall not be printed on the PAN card.

Who can apply on behalf of a NRI, minor, lunatic, idiot and court of wards?

Ans. Section 160 of the Income- tax Act, 1961, provides that a NRI, minor, lunatic, idiot and court of wards and such other persons may be represented through a Representative Assessee. In such cases, application for PAN can be made by the Representative Assessee.

Can a person hold more than one PAN number?

Ans. No, obtaining or possessing of more than one PAN is against the law, for which a penalty may also be imposed.

Can a person apply for a duplicate PAN Card, if his original PAN Card is lost / stolen?

Ans. Yes, a person may apply for a duplicate PAN Card in case his original PAN Card is lost / stolen. A duplicate PAN Card is issued with the same PAN number.

Is it mandatory to file Income Tax Return in India if the NRI obtains a PAN Card?

Ans. It is not mandatory for NRI to file Income Tax Return in India just because he / she has a PAN Card. If the NRI is earning income below the taxable limit (subject to certain conditions), he/she may not be required to file his / her Income Tax Return in the relevant FY.