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How to Apply for PAN card and What are its Importance

18 Feb 2022 0 COMMENT

Introduction

A PAN card is a vital document for any financial transaction. That includes opening bank accounts, investing in financial products, purchasing high ticket items like real estate, cars, filing taxes, etc. Having a PAN card is mandatory. 

What is a PAN Card?

PAN stands for Permanent Account Number that a unique 10-digit alpha-numeric code. The PAN system is a computerized system developed by the Indian government's income tax department. It assigns an identity to every Indian to record and store every tax and finance-related information against every individual's PAN code. Its primary purpose is to avoid any evasion from taxation. All your daily financial transactions can be linked to your PAN card. And that's why no two people can have the same PAN in India.

Who can apply for a PAN Card?

As an individual, you must apply for a PAN card if you earn in India and are liable to pay taxes – you can be an Indian or a foreign national. You must also apply for a PAN card if you own a business with a turnover of more than Rs 5 lacs in the last financial year. Following entities can use for a PAN,

  • Indian Citizens
  • Non-resident Indians (NRI)
  • Overseas Citizens of India (OCI)
  • Person of Indian Origin (PIO)
  • Foreigners under the jurisdiction of IT Act, 1961
  • Companies and firms
  • Governments, etc.

Benefits of being a PAN Card Holder

Here is a list that highlights a PAN Card's Importance,

Taxation

  • This is the primary purpose of a PAN card. You require a PAN card throughout filing your ITR, verifying it, and claiming IT refunds.

Additional Read: How to File Your Income Tax Return?

Identity Proof

  • PAN Card is an acceptable proof of identity everywhere in India and even outside India as it is certified by the Indian IT department and the Indian government. It displays your full name, date of birth, and photograph. Hence it can be used to prove any of these identity criteria.
  • You can use it for creating other essential documents like Driving License, Passport, Voter ID, etc.

Banking Purposes

  • A PAN card is a mandatory document that you need to submit to open a bank account in any bank category, be it – Public, Private or Cooperative.
  • You will not be issued any debit or credit card if you do not submit your PAN card to the financial institute.
  • You will require your PAN card submission at the foreign exchange centre to procure foreign exchange, too– be it a bank or a money exchange facility.
  • You may require loans to buy a home, purchase a vehicle, or pay for your education or other personal reasons. The processing of any loans from lending institutes like banks, etc., requires the mandatory submission of your PAN card.
  • Cash deposits over fifty thousand rupees in the banks or other financial institutions can be done only by submitting your PAN details.

Purchase and Sale

  • You require your PAN card to buy or sell any form of real estate in India. The sale deed will be incomplete without the PAN details of the buyer and the seller.
  • You will require your PAN card to complete the transaction of purchasing or selling vehicles such as cars, bikes, etc. that have a valuation of above Rs 5 lacs
  • A PAN card is also required to complete any transaction that involves buying or selling jewellery that costs above Rs. 5 lacs

Investments

  • Investments have become a way of life. You require a PAN card to process your investments in the financial markets such as stocks, shares, securities, mutual funds, commodities, etc.
  • You will require your PAN card even if you want to create a Fixed Deposit at any financial institution. The lending institute uses your PAN details to pay tax (TDS) on your behalf from the interest you earn.

Also Read: Open Demat Account without PAN Card

Utility Payments

  • Your application for new landline or mobile connections at any private or public telecom operator can be processed only after submitting your PAN card.
  • Procurement of other utility services like LPG line, internet connection, electricity also require you to submit your PAN card.
  • The insurance premiums you pay and the insurance claims you receive can successfully be made only after submitting your PAN card details.

How to apply for a PAN Card?

Prerequisite Documentation

If you want to apply for a PAN card, you will require a bunch of documents. For a smooth application process, you should keep these documents handy.

For Individuals

  • Identity proof – Passport, Aadhar Card, Driving License, Voter ID, etc.
  • Address proof – Utility Bills, Bank Statement, Marriage Registration Certificate, Domicile Certificate, etc.

For Other Entities

  • Companies, Trusts, Associations – Company Registration Certificate, Agreement Copy (with name and address) issued by an authorized Government body.
  • Partnership Firms - Company Registration Certificate, Partnership Deed
  • Foreign Nationals – Passport, OCI, or PIO issued by the Indian Government, VISA copy, Bank statement from the country of residence, etc.

PAN Card Application Process

Select the Application Form and fill it

You can start the application process through the online or offline mode by filling the application form,

  • Form 49A – Use this form if you are an Indian citizen
  • Form 49AA – Use this form if you are a foreign national

You can also get these forms online from the IT portal (www.incometax.gov.in) or the NSDL website (www.tin-nsdl.com). The main landing page of the website has a tab, 'Downloads'. Under this tab, you can click on 'PAN' to download the form. You can print out, fill it correctly and attach the necessary listed documents for the offline process.

Payment of Processing Charges

You have to pay for the PAN card processing charges through cash, cheque, or demand draft if you are going through the offline route. The demand draft or cheque has to be addressed to 'NSDL – PAN'. Alternately, you can use net banking, debit, or credit card for an online process. The PAN card cost varies from Rs 93 - 864 (excluding GST) depending on the applying entity.

Submission of Application Form and Documents

Courier the application form along with the required documents to the PAN card processing centre. Mailing Address - 'Income Tax PAN Services Unit, NSDL e-Governance Infrastructure Limited, 5th floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune – 411016'.

The online process is relatively swift. Fill the form on the website, make the necessary payment online itself, and complete the process by submitting the application form and documents.

Tracking the Status of the Application Process

Once you have submitted your application online or offline, you will receive an application number. You can use it to track the progress of your application. If there is an error in the application, you will be notified about it on your registered email and contact number.

Conclusion

The PAN card is an essential document, and that's why it must be stored in a secure place to avoid any incident of theft, damage, or loss. If you lose your original PAN card or need to make any corrections to it, you can apply for a duplicate/revised copy of the same through the IT portal or the NSDL website.

Disclaimer:

ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.