Understanding Your PAN




Understanding Your PAN

Importance of PAN :
PAN card has become a must hold   for each and every person to file the tax returns  or to do a financial transaction., whether he is  an Indian citizen or an NRI.

What is PAN?
A  Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department of India. Each set of numbers is unique to the individual, HUF, company, etc.

PAN is a permanent number, is unaffected by a change of address, even between states and is not transferable. It is illegal to own more than one PAN.

The PAN”s primary purpose is to bring a universal identification key factor that links and tracks various documents and information regarding taxes and financial transactions, such as loans, investments, buying and selling real estate and other business activities of taxpayers. By tracking the above it indirectly prevents tax evasion through non-intrusive means.

You can consider this number to be similar to the Social Security Number issued in the United States to USA citizens and other legal residents.

Myths Regarding PAN
Many  believe that PAN cards are used for tax purposes only.  It is also believed that once there is a  PAN card one has to  compulsorily file his/her  Income tax return. This is a myth. PAN numbers are required for the purpose of income tax but not the actual card itself. Photocopies of PAN cards are required as prove of identity in financial transactions such as opening a bank account, purchase and sale of property and motor vehicles, home telephone lines and investments, such as demat accounts and mutual funds, just to name a few. Just holding a PAN will not necessitate filing of tax return.

Applying for a PAN Card
Anyone can apply for a PAN card, whether they are working or not. There is no restriction on age, region or nationality. You can submit an application for an underage minor and even on behalf of a newborn. Applications must be signed by a legal parent or guardian.


New PAN:
-If the applicant has never applied for a PAN, does not have a PAN allotted to them, they can visit the Income Tax Department (ITD) website. The first step is to determine if a PAN has been allotted to them or not.

-If a PAN has not been allotted to them they can apply  for the PAN .

To apply for a new PAN card you need to submit at least two proofs of Identify and residence ( 2 passport size Photos as well )  from the following sources:

-Matriculation Certificate
-Recognized Educational Institute Degree
-Credit Card
-Bank Statement
-Ration Card
-Driving License
-Voter”s Identity Card
-Passport




PAN explained.......

PAN is a 10 digit alpha numeric number, where the first 5 characters are letters, the next 4 numbers and the last one a letter again. These 10 characters can be divided in five parts as can be seen below. The meaning of each number has been explained further.

1. First three characters are alphabetic series running from AAA to ZZZ
2. Fourth character of PAN represents the status of the PAN holder.
• C — Company
• P — Person
• H — HUF(Hindu Undivided Family)
• F — Firm
• A — Association of Persons (AOP)
• T — AOP (Trust)
• B — Body of Individuals (BOI)
• L — Local Authority
• J — Artificial Juridical Person
• G — Government
3. Fifth character represents first character of the PAN holder’s last name/surname.
4. Next four characters are sequential number running from 0001 to 9999.
5. Last character in the PAN is an alphabetic check digit.
Nowadays, the DOI (Date of Issue) of PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card.

So,   don't wait . If you don’t  have a PAN yet,  apply for one now.



CA. Premnath Hegde H N

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