The Ultimate Guide to Obtaining a PAN Card in India

PAN Meaning Awareness

A Permanent Account Number (PAN) is a 10-digit alpha-numeric number provided by the India Income Tax Department. This unique number is mandatory for tax payment, financial transactions, and identification for individuals and entities. As there is ongoing technological growth and changing regulation, it is vital to be aware of who must acquire a PAN, how to get one, and what compliance is needed.

Who Has to Apply for a PAN Card?

Government notifications and amendments to the Income Tax Act have broadened the categories required to obtain a PAN. The following are mandated to apply:

Taxpaying Individuals: Persons whose total income is more than the higher non-chargeable limit in a financial year must apply for a PAN.
Businessmen and Professionals: Whoever has gross receipts from his business or profession exceeding ₹5,00,000 in any preceding year must have a PAN.
Charitable Trusts: Charitable trusts filing return under Section 139(4A) of the Income Tax Act must have a PAN.
Quoting of PAN: Individuals who are proposing to undertake significant financial transactions such as opening a bank account, buying mutual funds, or property transfers are to quote their PAN.
Non-Individual Entities: All non-individual entities such as companies, partnership firms, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), and others who are liable for tax or are undertaking specified transactions are to procure a PAN.
Foreign Individuals and Entities: Foreign residents or individuals incorporated abroad with income in India are required to get a PAN via Form 49AA.
Students and Minors: Minimum age is not needed. Minors can apply for a PAN on behalf of their guardians, and students may require it for scholarships or as nominee for bank accounts.
Affiliated Persons: Directors, partners, trustees, or competent persons on behalf of non-individual entities must obtain a PAN application in case the entity undertakes transactions in excess of ₹2,50,000 in a financial year.
Voluntary Applicants: Any individual or entity has the liberty to submit a voluntary application for PAN for verification or compliance purposes.

Significant Provisions for PAN Application (Forms 49A & 49AA)

Choosing the Appropriate Form

Form 49A: For Indian citizens and Indian companies incorporated in India.
Form 49AA: For foreign citizens and non-resident companies formed or incorporated outside India.

PAN Form Filling Instructions

Personal Details:

Name and Address: BLOCK LETTERS alone, space between the words, and avoid using initials—use the full name as provided in official records.
Name of Father: Compulsory for all candidates, including married women. Mother's name is not compulsory but can be given.
Date of Birth/Incorporation: Fill in the DD/MM/YYYY format for precise entry.
Status/Category: Choose the respective code corresponding to your category as per the form.

Contact Details:

Give an active mobile number and email ID for communication and e-KYC process.

Source of Income:

State at least one source of income. In case of no income, choose "No Income."

Photographs:

Affix two passport size photos in the earmarked positions. Don't clip or staple them; sign one across for verification.

Proof of Identity, Address, and Date of Birth:

Affix self-attested photocopies of original documents. The valid documents include Aadhaar card, passport, voter ID, or driving license.

For Companies and Firms:

State the ROC number of registration, incorporation date, commencement date, and nature of business activities.

Verification and Signature:

The application must be signed by the signatory authorized to do so. In the case of individuals, sign here; guardians sign for minors. In the case of entities, an authorized officer's signature is necessary.

Who Can Sign the PAN Application?

Individuals: Must sign individually. If the individual is mentally incapacitated, then a guardian may sign.
Minors: Parent or guardian must sign the application.
HUF: Any adult member or the Karta may sign.
Companies: Signed by the Managing Director or a director empowered by the company. A holder of a valid Power of Attorney can sign on behalf of the non-residents.
Firms: Signed by the Managing Partner or any other partner, if the Managing Partner is unavailable.
Trusts and Associations: By the Principal Officer or any eligible member/official.
Absentees: Signed by a person holding Power of Attorney, along with a photocopy of the POA.

Process of submitting the PAN application

Online submission

NSDL (Protean) and UTIITSL Portals: Complete Form 49A/49AA online, upload documents, pay fee, and e-sign the form.
Instant e-PAN for Aadhaar Holders: Access the Income Tax website to apply for instant e-PAN through Aadhaar authentication, typically generated within 10 minutes at no cost.

Physical Submission

Print the acknowledgement form, add photographs and documents, and send to the concerned NSDL or UTIITSL address.

Application Fees

Fees range from ₹66 to ₹1,017 based on mode of submission and dispatching location. Free instant e-PAN is provided to applicants who apply with Aadhaar.

Processing Time

Regular applications are settled within 15-20 days. Tatkal service expedites dispatch within 48 hours at extra cost. Instant e-PAN is sent out in 10 minutes.

Suo Moto PAN Issuance by Assessing Officers

The Assessing Officer can allot a PAN to any person liable for tax independently, even on its own initiative. From June 1, 2006, any person registering under the Central Sales Tax Act or state sales tax laws is mandatory to possess a PAN before registration.

Recent Amendments and Digital Advancements

PAN 2.0: The new PAN card is equipped with a QR code for added security. Existing holders can upgrade at a minimal fee via the NSDL portal.
e-PAN: The electronic PAN card in PDF form is acceptable as valid proof of PAN to both government and financial institutions.
Aadhaar Integration: Aadhaar linking with PAN is compulsory for the majority of taxpayers, and e-PAN generation is based on Aadhaar.

Examples of PAN Application Scenarios

A Mumbai freelance graphic designer expects her annual income to be more than ₹6,00,000. She has to apply for PAN through Form 49A to satisfy tax rules and get a bank account for her business.
A US technology company setting up a liaison office in India has to apply for PAN through Form 49AA to ensure Indian rules.
A 16-year-old student who needs a scholarship in Delhi must have a PAN to qualify as a nominee of a fixed deposit for the scholarship. The parent will obtain the PAN application for the minor.

Key Compliance and Verification Points

Accuracy is Imperative: Any incorrect declaration can lead to penalties under Section 277 of the Income Tax Act.
Change of Jurisdiction Notification: Inform your Assessing Officer to update your PAN jurisdiction on moving.
Tracking Status of Application: Track the PAN status online using your acknowledgment number from NSDL/Protean or UTIITSL portals.
For High-Value Transactions Mandatory: PAN is mandatory for cash deposits of over ₹50,000, property transactions, opening demat accounts, and buying mutual funds.