Applying procedure for PAN card

Applying procedure for PAN card

How to apply for PAN card

What is PAN card?

A permanent account number (PAN) is a ten-character alphanumeric identifier, issued in the form of a laminated “PAN card”, by the Indian Income Tax Department, to any “person” who applies for it or to whom the department allots the number without an application.

Benefits of Having a PAN card

1. It acts as an Identity proof, showing your relation to India
2. You have to compulsory mention it if you file taxes in India, start a business, buy/sell property, maintain bank accounts, transfer money, etc.
3. Basically, you need to mention it if you want to carry most kinds of financial or investment related transactions in India.
4. In most of the cases you might be asked for it while conducting financial and investment related transactions in India.

Apart of above, here we have more benefits 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.

What is penalty to not to do quote PAN card?

Under Section 272B of the Income Tax Act, 1961, the department can impose a penalty in case of default in complying with provisions relating to PAN, i.e., failure to obtain, quote, or authenticate PAN. The amount of penalty shall be ₹10,000 for each default.

What are the steps to apply PAN card?

1. To apply online for a PAN card, visit on NSDL

2. On the page a form titled Online PAN application. Under Application Type select New PAN – Indian Citizen (Form 49A). If you’re a foreign national, select New PAN – Foreign Citizen (Form 49AA).

3. Select the category of PAN card

4. Now fill personal details such as name, date of birth, mobile number, etc., enter the captcha\ code and click Submit.

5. Now three choices reflect — authenticate via Aadhaar to avoid sending any documents, scan documents and upload them via e-sign, or to physically submit documents.

6. We chose to authenticate via Aadhaar as all it needs is an OTP and payment. If you don’t want that option, the steps for the other two are similar except the part where you have to send documents.

7. Enter all details such as Aadhaar number (optional) as requested on screen, and click Next.

8. This step requires you to fill your name, date of birth, address, etc. Do that, and click Next.

9. Now you will hit the AO code (Assessing Officer code). Just select one of the four choices at the top — Indian Citizens, NRI and Foreign Citizens, Defence Employees, or Government Category.

10. Then under Choose AO Code, select your state and area of residence. Wait for a few seconds and see full list of AO codes in the box below. There are different categories for companies, non-salaried people, government servants, private sector employees, etc. Click on the correct AO code and it’ll be auto-filled in the form above. Click Next.

11. Select the documents you have submitted as proof of age and residence from the drop-down menu, fill in required details, and then click Submit.

12. Now choose online payment methods.

13. Once you have paid, you will be asked to authenticate via Aadhaar OTP, or submit documents via e-sign, or to physically send the documents to NSDL.

After going through the above-mentioned uses/benefits of PAN card, it will become clear to an individual why having a PAN card is so important for nowadays transactions.

 

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