PAN Card - Meaning, History, Types, and Importance

History of PAN in India

Before the concept of PAN was introduced, there was a GIR number assigned to taxpayers. This was basically a manual system and was unique only within a ward or under a particular assessing officer. However, the number was not unique at the country level. Since GIR unique not unique, there could be higher chances of miscalculation and errors, or cases of mistaken identity during tax assessment.

The GIR number was allotted by the Assessing Officer to a tax payer and it included the Assessing Officer's information as well.

In the year 1972, the concept of PAN was rolled out by the Indian government and was made statutory under section 139A of the Income Tax Act, 1961. Initially a voluntary process, PAN was made mandatory for all tax paying individuals in 1976.

The initial PAN number allotments were made manually, and to avoid duplication, each ward/circle received a certain set of numbers. This series was abandoned in the year 1995.

Structure of PAN Card

As per the guidelines of Know Your Customer or KYC, the details furnished on a PAN Card are as follows:

1) Name of the cardholder 

2) Father’s name of the cardholder

3) Date of Birth of the cardholder

4) 10-character alphanumeric Permanent Account Number or PAN

5) Signature of the cardholder

6) Photograph of the cardholder

7) The PAN Card also comes with the logo and hologram of the Government of India along with a tag of the Income Tax Department (ITD).

Understanding the Permanent Account Number (PAN)

As mentioned above, the PAN is a combination of 10 characters. This combination can be explained as follows:

1. The first 3 characters are alphabetic and can be any combination from the English alphabet.
2. The fourth character is also an alphabet which denotes the category of the taxpayer. The categories are as follows:
   1. A – Association of Persons
   2. B – Body of Individuals
   3. C – Company
   4. F – Firms
   5. G – Government
   6. H – Hindu Undivided Family
   7. L – Local Authority
   8. J – Artificial Judicial Person
   9. P – Individual
   10. T – Association of Persons for a Trust

1. The fifth character is also an alphabet and it denotes the first character of the cardholder’s surname.
2. The next four characters are numeric and are random in nature.
3. The last character is an alphabet again.

Types of PAN Cards in India

PAN Cards are issued to different tax-paying entities. Based on that, the types of PAN are:

1. PAN Card for Indian Individuals
2. PAN Card for Indian Companies
3. PAN for Foreign Citizens
4. PAN for Foreign Companies

PAN Cards issued to individuals have the person's photograph, name, father's name, date of birth, signature, an authenticity hologram, QR Code, date of issue of the PAN, and the Permanent Account Number. PAN Cards issued to companies have the name of the company, its date of registration, the PAN number, hologram, QR Code, and date of issue of PAN. It will not have a photograph or signature.

PAN Card Eligibility

Under section 139A of the Income Tax Act, the following taxpaying entities are required to have a Permanent Account Number:

1. Any person who has paid tax or is liable to pay tax to the Income Tax Department. This will be decided based on the tax slabs.

1. Any person who is carrying out a business or professional practice which earns him a yearly turnover of more than Rs.5 lakh in any year of assessment.

1. Importers and exporters who are liable to pay any form of tax or duty charges as per the Income Tax Act or as per any prevalent law

1. All kinds of trusts, charitable organisations, and associations.

1. All tax paying entities – minors, individuals, HUFs, partnerships, companies, body of individuals, trusts, and others – should apply for PAN.
2. PAN eligibility applies to individuals and entities liable to pay tax, conduct business over ₹5 lakh, or engage in import/export or charitable activities.

Why Is a PAN Card Important in India?

1. PAN Card is important for taxpayers .
2. It is necessary for all financial transactions.
3. It is used to track the inflow and outflow of your money.
4. It is important when paying income tax, receiving tax refunds, and receiving communication from the Income Tax Department.

How to Apply for a PAN Card?

Given below is the process you will have to follow if you wish to apply for PAN Card online:

1. Protean e-Gov Technologies Limited (formerly NSDL)
2. UTIITSL

You can also apply offline at any of the district-level PAN agencies. You can apply for a new PAN Card as well as make a correction or change the information yourself. You can even request for a duplicate PAN Card or reprint the card if you lose the original.

For new PAN, Indian citizens and NRIs (including companies, NGOs, partnership firms, local bodies, trusts, etc.) need to fill out  Form 49A. Foreigners and foreign entities need to use Form 49AA. These forms, along with all the required PAN documents , should be submitted to the Income Tax PAN Services Unit.

Once you apply for a new or duplicate PAN, or request for corrections/changes, you can track the status of PAN application via the acknowledgement number provided.

As per the Protean e-Gov Technologies Limited website (formerly NSDL), the entire process of printing and dispatching cards takes approximately 2 weeks or 14 days.

How to Apply for a PAN Card Offline?

Given below is the process you will have to follow if you wish to apply for PAN Card offline:

1. Visit the official website of TIN-Protean e-Gov Technologies Limited (formerly NSDL) by clicking on the link
2. On the main page, under the “Downloads’ section, click on ‘PAN’. You will be directed to a new page.
3.  Click on ‘Form 49A’.
4. The Form 49A application form will appear on your computer screen in the pdf format. Download the form and take a print out.
5. Fill the form and make sure all the details entered by you are correct.

1. Make sure you attach all the necessary documents including your passport size photograph.
2. You will have to pay the registration fee which can be paid via demand draft in favor of ‘Protean e-Gov Technologies Limited – PAN’ payable at Mumbai. You will have pay Rs.115.90.
3. Enclose the application form and photocopies of your documents in an envelope. Make sure you mention ‘APPLICATION FOR PAN-N-Acknowledgement Number’ on the envelope and send it to the address.

Address: Income Tax PAN Services Unit, Protean e-Gov Technologies Limited e-Governance Infrastructure Limited, 5th floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune – 411016.

You will later receive an application number which you can use to track the status of your PAN Card application .

Documents Required to Apply for a PAN Card

To apply for a PAN Card, you will have to submit a host of documents including Form 49A or 49AA. Given below is the list of required documents for PAN Card you will have to submit while applying for a PAN Card:

If you are an Individual Applicant

1. Proof of identity such as Aadhaar, Voter ID, Driving License, etc.
2. Proof of address such as utility bill, water bill, bank account statement, statement of your credit card, Passport, Driving License, Domicile certificate issued by the Government, certificate of marriage, matriculation certificate, etc.

If you belong to a Hindu Undivided Family (HUF)

1. You will have to submit an affidavit issued by the Karta of the HUF. The affidavit must clearly mention the name, address, and every coparcener father’s name.
2. If you belong to HUF and is individually applying for a PAN Card, then you will have to submit the proof of identity, proof of address, and date of birth proof.

For Companies Registered in India

1. A copy of the Registration Certificate issued by the Registrar of Companies is to be submitted.

Firms and Limited Liability Partnerships Registered or Formed in India

1. A copy of the Registration Certificate issued by the Registrar of Companies is to be submitted.
2. A copy of the Partnership Deed is to be submitted.

For Trusts Formed or Registered in India

1. You will have to submit a copy of the Registration Certificate Number issued by a Charity Commissioner.

For Association of Persons

1. Agreement Copy or Registration Number Certificate issued by the Registrar of Co-operative Society or Charity Commissioner, or any document issued by the Central or State Government which clearly mentions your address and identity.

Applicants who are not Citizens of India

1. Proof of identity such as a Copy of PIO issued by the Government of India, Copy of OCI issued by the Government of India, Passport Copy, etc.
2. Proof of Address can be bank statement of the residential country, NRE Bank statement, Copy of VISA granted by an Indian company, registration certificate issued by FRO, etc.

Uses of PAN in Financial Transactions

1. PAN needs to be quoted while paying direct taxes.
2. Taxpayers need to input their PAN when paying income tax.
3. While registering a business, PAN information needs to be furnished.
4. A lot of financial transactions require PAN information. Some of these transactions are:

General Uses of Having a PAN Card

1. Since PAN Card contains information such as Name, Age and photograph, it can be used throughout the country as a valid identity proof.
2. PAN is the best possible way to keep track of your tax payment. Otherwise, you might be required to pay it multiples times since your tax payment cannot be verified.
3. Since PAN is unique for every entity, its misuse is almost impossible for purposes of tax evasion or other devious means.
4. PAN Card can be used to avail utility connections such as electricity bill, telephone, LPG, and internet.

Who Should Get a PAN Card?

Under section 139A of the Income Tax Act, the following taxpaying entities are required to have a Permanent Account Number:

1. Any person who has paid tax or is liable to pay tax to the Income Tax Department. This will be decided based on the tax slabs.
2. Any person who is carrying out a business or professional practice which earns him a yearly turnover of more than Rs.5 lakh in any year of assessment.
3. Importers and exporters who are liable to pay any form of tax or duty charges as per the Income Tax Act or as per any prevalent law
4. All kinds of trusts, charitable organizations, and associations.

All tax paying entities – minors, individuals, HUFs, partnerships, companies, body of individuals, trusts, and others – should apply for PAN.

What Happens if you don't have PAN Card?

If your income falls in the taxable bracket, not having a PAN Card would result in:

1. Flat 30% tax on your earnings and wealth, as stipulated by the Income Tax Department of India. This rule applies to individuals, companies and all entities eligible for tax, including foreign nationals and firms registered outside India.
2. Not being able to purchase a motor vehicle, buy immovable property worth over Rs. 10 lakh, or open a bank account, among other activities.
3. Businesses unable to conduct a large chunk of their financial activities and procurement.

*Please note that these rules may change once Aadhaar and PAN become interchangeable.

PAN Card Application Do's and Don'ts

1. Fill in all the details as per the identity and address proof documents you are submitting.
2. Get your thumb impression attested by a Magistrate/Notary before submitting the form, to avoid disqualification.
3. Write the complete address and provide accurate contact details in the form.
4. Fill in the application form in capital letters.
5. Don't make corrections or over-write anywhere on the form.
6. Do not use initials in the first name or last name columns.
7. Do not apply for a new PAN Card if your old PAN Card is lost/stolen/defaced. Request for a duplicate PAN instead.

1. Please use ‘Form 49AA’ when requesting the allocation of a PAN.

1. Please attach two recent colour photographs with dimensions of 3.5 cm X 2.5 cm. 
2. As required by Rule 114(4) of the Income Tax Rules, 1962, please include proof of identity (POI) and proof of address (POA). The POA must include the address listed on the application. 
3. Fill out column 14 of the application form with the representative assessee's information (if applicable).
4. In case Representative Assessee is appointed, provide their identity proof and address proof.
5. Include your phone number and email address on the application form.

1. Make sure to enter the right ZIP code in the address field.
2. Never staple or pin the photograph.
3. Never submit address proof or identity proof that are not in the applicant's name.
4. Ensure that you are not using initials or abbreviating your name.
5. Don't fill in the box with any other information besides your signature, such as a date, designation, rank, etc.

1. Make sure to keep your signature inside the box.

A PAN Card acts as an important document which you can use for various purposes. Not only it is a nationally accepted identity proof but it is also an important document while filing  income tax (IT) returns. Apart from this it is also used to perform various personal and business transactions.

The following are the list of transactions which can be done only if you have your PAN Card:

1. Opening a bank account
2. Filing your IT returns
3. Applying for a loan
4. Applying for a gas or telephone connection
5. Purchasing or selling a new property
6. Getting a debit card or credit card
7. Opening a fixed deposit account
8. Making insurance premium payments

Legal Implications of Having Multiple PAN Cards

Multiple or duplicate PAN Cards refer to the issuance of more than one PAN Card or PAN number to the same individual. According to Section 139A (7) of the Income Tax Act, no individual can apply for, possess, or obtain more than one Permanent Account Number under the new series.

It's possible for an individual to unintentionally possess more than one PAN without being aware of it. However, it is not illegal to have two physical copies of the same PAN Card number; the second one would simply be considered a duplicate copy.

Tracking PAN Transactions

The government recently unveiled a programme by which it can track transactions made through a PAN Card for the purpose of calculating tax. Known as the Income Tax Business Application-Permanent Account Number or ITBAN-PAN, it will enable the Income Tax Department to track every transaction made where a particular PAN number was quoted.

1. All financial transactions such as mergers, acquisitions, liquidation, and amalgamation of PAN as well as dissolution information where a particular PAN Card was quoted can be traced through the software.
2. All existing PAN information and the entire database of PAN information have also been moved to this software.

PAN Card Forms

In order to apply for a PAN Card, an application form has to be filled out. There are two types of application forms – Form 49A and Form 49AA. Both forms can be availed through both online and offline platforms.

1. Form 49A - The Form 49A is used by Indian individuals or entities to apply for a PAN Card. Students and minors can also apply for PAN using this form.

1. Form 49AA - The Form 49AA is the application form for PAN which is used in the case of foreigners.

The forms have to duly filled up and sent  to the TIN-Protean e-Gov Technologies Limited's office.

Cost of PAN Application

An individual can make an online application for his or her PAN Card. This can be done through the Protean e-Gov Technologies Limited website (formerly NSDL) or the UTITSL portal. The cost of application for PAN can be summed as follows:

1. For Indian communication address: Rs.93 (excluding GST)
2. For foreign communication address: Rs.864 (excluding GST)

How to Make Changes or Corrections in a PAN Card?

Given below is the procedure you will have to follow if you wish to make changes or correction to your PAN Card online:

1. Visit Official site

1. Select ‘Changes or Correction in existing PAN Data/ Reprint of PAN Card (No changes in existing PAN Data)’.
2. Next, enter the relevant details.
3. Click on ‘Submit’.
4. A token number will be displayed on the screen.
5. Click on ‘Continue with PAN Application Form’,

1. Enter the relevant details on the next page.
2. Choose the way you would like to submit the application form next.
3. Next, choose the type of PAN.
4. Next, your contact details must be entered.
5. Next, the relevant documents must be uploaded.

1. Click on ‘Submit’.
2. Next, the payment must be made.

The PAN will be dispatched to your address with two weeks from the date the application has been received.

How to Apply for a Duplicate PAN Card After Losing the Original?

You will have to follow the steps given below to order a duplicate PAN Card if you have lost your Original PAN Card:

1. Visit the TIN-Protean e-Gov Technologies Limited (formerly NSDL) or UTIITSL website to apply for a duplicate PAN Card.
2. If you are a citizen of India then you will have to submit Form 49A, otherwise Form 49AA if you are a foreigner.
3. Complete the payment required to apply for a duplicate PAN Card. You can also make the payment via demand draft.
4. Take the printout of the form and send to the address given below:

Address - Income Tax PAN Services Unit, Protean e-Gov Technologies Limited e-Governance Infrastructure Limited, 5th Floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune – 411 016.

1. It will take up to 45 days for you to receive your duplicate PAN Card.

PAN Card Enquiry/Tracking and Online Status Check

1. The status of your PAN Card can be checked online after you have submitted the application for it.
2. The application status will show you whether the card has been issued or is in transit.
3. You can check the status of your PAN Card application on either TIN-Protean e-Gov Technologies Limited or UTIITSL website.
4. You can figure out the status of your PAN Card application with your name and date of birth entered on the website.

Which Authority Issues PAN Cards in India?

PAN Card is issued by the Income Tax Department with help from authorized district-level PAN agencies, UTI ITSL (UTI Infrastructure Technology and Services Limited), and Protean e-Gov Technologies Limited (formerly National Securities Depository Limited-NSDL). There are several TIN-Facilitation Centers and PAN centers across the country, run by Protean e-Gov Technologies Limited that help citizens get their PAN Card.

The process of issuing  PAN works on the PPP (Public Private Partnership) model. This is done to maintain the economy, efficiency, and effectiveness of managing, processing, and issuing PAN applications.

Permanent Account Number (PAN) for e-KYC

You can use your PAN for e-KYC. e-KYC is a major requirement which is asked for by most service providers and it offers a number of benefits. Some of the benefits of the PAN e-KYC can be summed up as follows:

1) Quick processing: With the help of PAN e-KYC, you can share information with a service provider within a few minutes through dedicated and secured channels. This helps in making the processing quicker.

2) Hassle-free: As it is a paperless process, the PAN e-KYC enable hassle-free management of documents and information.

3) Authorization: The data which is shared through PAN e-KYC is authentic data. This data is legal and nationally acceptable for the parties who are involved in the transaction.

4) Secured data: The data transferred between the cardholder and the service provider cannot be tampered as they are transferred through secure channels only. In addition to that, the data cannot be used without the consent of both the parties who are involved in this process.

However, it is mandatory to link your Aadhaar and your PAN for the purpose of e-KYC and verification which helps you avail the services and benefits from different service providers.