1. What is Permanent Account Number (PAN)?
Permanent Account Number, in short PAN, is the unique identification number allotted by Income Tax Department to the person who applies for it. It is a ten-digit alphanumeric number issued in the form of a laminated card.
2. Can a minor have PAN?
Yes. Minor can also have a PAN. The legal guardian can apply for the PAN of the minor.
3. Why is it necessary to have PAN?
It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. It is also compulsory to quote PAN in all documents pertaining to specified financial transactions.
4. Who is required to apply for PAN?
Any person who is filing return of income, making payment of tax or entering into any of the specified transactions for himself or behalf of any other person.
5. Uses of PAN
It is compulsory to quote PAN in all documents related to the following specified transactions:
- Sale or purchase of a motor vehicle
- Opening of bank account
- Application for issue of debit or credit card
- Opening of Demat account
- Payment to hotel or restaurants where payment is made in cash more than Rs. 50,000 at any one time
- Payment for foreign travel or purchase of foreign currency where payment is made in cash more than Rs. 50,000 at any one time
- Purchase of mutual funds exceeding Rs. 50,000
- Purchase of bonds or debentures exceeding Rs. 50,000
- Purchase of RBI bonds exceeding Rs. 50,000
- Cash deposit with bank or post office in any one day above Rs.50,000
- Purchase of demand draft or pay order issued by the bank, in cash on any one day above Rs.50,000
- Time deposit made with Bank, Post office, Nidhi Company or NBFC in excess of Rs. 50,000 or aggregating to Rs. 5 lakh in any financial year
- Payment for one or more pre-paid payment instruments issued by RBI to a bank/co-operative bank/any other company or institution where payment exceeds Rs. 50,000 in any one financial year
- Payment of life insurance premium more than Rs. 50,000 in a year
- A contract for sale or purchase of securities (other than shares) in excess of Rs. 1 lakh per transaction
- Sale or purchase, by any person, of shares in a company not listed in a recognised stock exchange more than Rs. 1 lakh per transaction
- Sale or purchase of any immovable property in excess of Rs. 10 lakhs
- Sale or purchase, by any person, of goods or services of any nature other than those specified above in excess of Rs. 2 lakhs per transaction.
6. Consequences of not having PAN
There are three significant implications for not having PAN:
- You will not be able to enter into the specified transactions.
- Assessing Officer may impose the penalty of Rs. 10,000 in case you entered into certain transactions but not quoted your PAN.
- Credit of TDS will not be allowed to you if the PAN is not furnished to the deductor.
7. Can a person have more than one PAN?
No. If a person has obtained or possesses more than one PAN, it is against the law, for which a penalty of Rs.10,000/- may be imposed.
8. How to apply for PAN?
PAN application should be made only on Form 49A. It can be downloaded from tin-nsdl.com
9. What if I lost my original PAN Card?
If you lost your PAN card, you could get the duplicate PAN Card by applying for it to the Income Tax Department, NSDL or UTISL. Your PAN, i.e., 10 digits alphanumeric number already issued to you, will remain same.
- Question that can be added
1. What is Tax Deduction Number (TAN)?
TAN is Tax Deduction Number which is a 10digit alpha numeric number allotted to those who are liable to deduct/collect tax at source by the Income Tax Department.