PAN CARD APPLICATION

PAN Card Application

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PAN or Permanent Account Number is a 10 digit alpha-numeric identity issued by the Income Tax Department of India. It is a unique account number allocated by the Income Tax Department, which is used to track and manage all the Income Tax assessee in India.

Although the PAN card application is voluntary, it must be obtained before engaging in certain transactions. For entering into a financial transaction exceeding a specified amount, quoting PAN is compulsory. Also, every business entity must apply for PAN card application within the 30 days of its formation or incorporation.

Benefits of Having a PAN Card

1.IT Returns Filing

All individuals and entities who are eligible for Income tax are expected to file their IT returns. A PAN card is necessary for filing of IT returns, and is the primary reason individuals, as well as other entities, apply for one.

2.Identity Proof

PAN card serves a valid identity proof. Other than voter card, Aadhaar card, PAN card is also accepted by all financial institutions and other organisations as an identity proof.

3.Tax Deductions

One of the essential reasons to get a PAN card is for the purpose of taxation. If the entity or person has not linked the PAN number with his bank account, and the annual interest earnings on savings deposits is more than Rs. 10,000/- then the bank would deduct 30% TDS instead of 10%.

4.Claiming Income Tax Refund

Many times, the TDS deducted from a taxpayer’s income is more than the actual tax that he is supposed to pay. In order to claim excess tax paid, taxpayer has to have a PAN linked to his bank account.

5.Starting a Business

In order to start a business, a company or any other entity mandatorily needs to have a PAN registered in the name of its entity. Tax Registration Number (TRN) is needed for a business which is obtained only if the entity has a PAN.

6. Opening a Bank Account

All public, private and co-operative banks have made it mandatory for an individual or a company to have a bank account in its name in order to open a savings or current account. Only under Pradhan Mantri Jan Dhan Yojana, a person can open a zero balance account by using voter card or other identity proof.

7.Opening Demat Account

PAN card is also mandatory for an individual or entity to open a Demat Account, which is needed to hold shares in dematerialized form.

8.Purchase & Sale of Immovable Assets

One of the benefits of pan card is eligibility of an individual or entity to enter into transactions of sale or purchase of assets. PAN is required to be quoted in the deed made during sale or purchase of any immovable property valued at 10 lakh rupees or more.

9.Foreign Travel

Cash payment related with foreign travel of an amount more than Rs. 50,000/- inclusive of forex purchase requires PAN card

10.Time Deposit

Deposits with post office, co-operative banks, non-banking financial companies, will also need PAN, deposits adding up to Rs. 5 lakh or more every year will require PAN

11.Hotel and Restaurant Bills

Payments more than Rs. 50,000/- for hotel and restaurant bills requires PAN to be given

12.Cash Cards and Pre-Paid Instruments

Cash payment adding up to more than Rs. 50,000/- per year will need PAN to be furnished

13.Purchase or Sale of Goods and Services

Purchase or sale of any good or service for an amount more than Rs. 2 lakh per transaction will require PAN to be furnished

14. Bank Drafts, Pay Orders and Banker’s Cheque

PAN card is needed for Bank Drafts, Pay Orders and Banker’s Cheque with a transaction more than Rs 50000/- in a day. This implies that the transactions more than 50000/- will only need PAN card.

Documents Requirement for PAN Application

Address Proof: Copy of Aadhar Card or other address proof, in case of individual

Photograph: Two passport size photograph, in case of individual

Birth Certificate: Copy of Birth Certificate, in case of Minor

Proof from Parents: ID proof and Address proof of any of the parent

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PAN Card Application Process

Day 1

1. Collection
2. Collection of required documents

Day 2

1. Preparation and verification of Application
2. Handing the Application to Income Tax Authority
3. Sharing acknowledgment receipt

Day 3 - 10

1. Government processing
2. Application processing by IT department