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 any changes to personal details of the PAN holder.

PAN enables the Income Tax Department to link all financial transactions of the PAN holder which includes tax payments, filing tax returns, TDS deductions, purchase/sale of property, etc., thus acting as an identifier of the PAN holder with the Income Tax Department.

Who issues PAN card?

Ans. The Income Tax Department issues PAN cards in partnership with UTI Technology Services Ltd and National Securities Depository Ltd.

What procedure should be followed to apply for a PAN?

Ans. PAN application can be made online/ manually in prescribed form along with supporting documents (proof of identity and address) 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. Physical PAN card is usually received 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, PAN number is allotted within 10-12 working days from submission and e-PAN card is shared (if email ID provided) within 15 working days.

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:

1. Opening a Bank Account with a banking company or a co-operative bank;

2. Opening a Demat account with a depositary ;
3. Time deposit with below institutions exceeding Rs. 50,000/- or aggregating to more than Rs. 5 lakhs during a Financial year :-
  •   a Banking company of co-operative bank
  •  a Post office;
4. Filing Tax Returns, challans for payment of tax, etc.;
5. Sale or Purchase of shares of a company listed in a recognized stock exchange –amount exceeding Rs. 1 lakh per transaction;
6. Sale or Purchase of goods or service of any nature exceeding Rs. 2 lakh per transaction;
7. Sale or Purchase of immovable property exceeding Rs.10 lakhs;
8. Sale or purchase of a motor vehicle or vehicle;
9. Payment to a Mutual Fund for purchase of units exceeding Rs. 50,000/-;
10. Payment to a Company or an Institution for acquiring debentures/bonds exceeding Rs. 50,000/-;
11. Payment of Life insurance aggregating to Rs. 50,000/- in a Financial year;
12. 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;
13. All entities entering into the transactions exceeding Rs. 2,50,000/-.

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.

Are all entities entitled to obtain PAN card?

Ans. Yes, as per updated Income Tax Rules, 1962; all Entities are mandatorily required to obtain PAN card even if the total sales, turnover or gross receipts are not likely to exceed Rs. 5 lakh in a Financial Year (i.e. from 1st April to 31st March every year).

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. A NRI who is a 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.

Is father’s name mandatory to mention on the PAN application form?

Ans. No, father’s name is not mandatory in cases where mother of the applicant is a single parent.

Can a person get his/her mother’s name printed on the PAN card even they have mentioned the father’s name?

Ans. Yes, mother’s name can be printed on PAN card (even though father’s name is mentioned) by selecting appropriate option on the PAN application form.

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.