1. What is PAN (Permanent Account Number)
PAN is a 10-digit code allotted to each essessee by I.T. Dept.
Quoting of the Permanent Account Number (PAN) has been made mandatory by the I.T. Department in many instances. An assessee needs to mention his PAN in his return.
A person has to apply in Form 49A to the Assessing Office having jurisdiction to assess the applicant. In order to improve PAN related services, the Dept. has authorized UTI Investor Services Ltd. (UTISIL) to manage IT PAN Services Centers in all cities or towns where there is an Income Tax Office, and National Securities Depository Limited (NSDL) to dispense PAN services.
The main advantages of having a PAN include, convenience to locate the Assessing Officer, Faster Assessment, Processing of Refunds, ensuring Tax Compliance, Credit for Payment of Taxes, and Control over unregulated and Undisclosed Transactions.
The application form should be filled in carefully and completely giving specified information, including name of the assessee, father’s name, address, date of birth, sources of income, etc.
2. Who has to apply for PAN? [Section 139A (1)]:
Every person who has not been allotted a permanent account number shall, within such time, as may be prescribed, apply to the Assessing Officer for the allotment of a permanent account number in the following cases if:
(i) his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to income-tax; or
(ii) he is carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed ₹5,00,000 in any previous year; or
(iii) he is required to furnish a return of income under section 139(4A), i.e., return of trust and charitable institutions; or
(iv) Not relevant now.
(v) the person being a resident, other than an individual, which enters into a financial transaction of an amount aggregating to ₹2,50,000 or more in a financial year; or
(vi) the person is the managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of the person referred to in clause (v) or any person competent to act on behalf of the person referred to in clause (v).
(vii) the person intends to enter into such transaction as may be prescribed by the Board in the interest of revenue. Thus, the Board has been empowered to prescribe the transactions where obtaining PAN shall become mandatory.
3. Time Limit for submitting Application for Allotment of PAN
|Situation||Time limit for a making application|
|1. If his total income or the total income of any other person in respect of which he is assessable under this Act during any previous year exceeded the maximum amount which is not chargeable to income tax.||on or before 31st May of the assessment year in which such income is assessable|
|2. If he is carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed ₹500,000 in any financial year.||on or before the end of that financial year|
|3. If he is required to furnish a return of income under section 139(4A), i.e. return of trust and charitable institutions.||on or before the end of the relevant financial year|
|4. In the case of a person who is entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB (relating to TDS) in any financial year.||on or before the end of such financial year|
|5. In the case of a person, being a resident, other than an individual, which enters into a financial transaction of an amount aggregating to ₹2,50,000 or more in a financial year and which has not been allotted any permanent account number.||on or before the 31st day of May immediately following such financial year|
|6. In the case of a person, who is the managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer of the person referred to in clause (5) above or any person competent to act on behalf of the person referred to in clause (5) above and who has not been allotted any permanent account number.||on or before the 31st day of May immediately following the financial year in which the person referred to in clause (5) above enters into financial transaction specified therein.|
|7. If he is a person who is not required to apply for PAN under any of the above clauses||application can be made at any time|
4. PAN to be quoted in certain cases [Section 139A (5)]:
On allotment of permanent account number, every person shall:
(a) quote such number in all his returns to, or correspondence with, any income-tax authority;
(b) quote such number in all challans for the payment of any sum due under this Act;
(c) quote such number in all documents pertaining to such transactions as may be prescribed by the Board in the interests of the revenue, and entered into by him.
Every person shall intimate the Assessing Officer any change in his address or in the name and nature of his business on the basis of which the permanent account number was allotted to him.
5. Transactions where Quoting of PAN made Compulsory [Section 139A(5)(c) and Rule 114B]:
Quoting of PAN is compulsory in the following transactions:
Every person shall quote his permanent account number in all documents pertaining to the transactions specified in the Table below, namely: —
|SI. No.||Nature of’ transaction||Value of transaction|
|1.||Sale or purchase of a motor vehicle or vehicle, as defined in section 2(28) of the Motor Vehicles Act. 1988 which requires registration by a registering authority under Chapter IV of that Act, other than two wheeled vehicles.||All such transactions.|
|2.||Opening an account [other than a time-deposit referred to at SI. No.12 and a Basic Savings Bank Deposit Account] with a banking company or a cooperative hank to which the Banking Regulation Act, 1949. applies (including any bank or banking institution referred to in section 51 of that Act).||All such transactions.|
|3.||Making an application to any banking company or a co-operative bank to which the Banking Regulation Act. 1949, applies (including any bank or banking institution referred to in section SI of that Act) or to any other company or institution, for issue of a credit or debit card.||All such transactions.|
|4.||Opening of a demat account with a depository, participant, custodian of securities or any other person registered under section 12(IA) of the Securities and Exchange Board of India Act. 1992.||All such transactions.|
|5.||Payment to a hotel or restaurant against a bill or bills at any one time.||Payment in cash of an amount exceeding ₹.50,000|
|6.||Payment in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time.||Payment in cash of an amount exceeding ₹.50,000.|
|7.||Payment to a Mutual Fund for purchase of its units.||Amount exceeding ₹.50,000|
|8.||Payment to a company or an institution for acquiring debentures or bonds issued by it.||Amount exceeding ₹.50,000.|
|9.||Payment to the Reserve Bank of India, constituted under section 3 of the Reserve Bank of India Act, 1934 for acquiring bonds issued by it.||Amount exceeding ₹.50,000.|
|10.||Deposit with, — (i) a banking company or a co-operative bank to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act); (ii) Post Office.||Cash deposits,— (i) exceeding ₹.50,000 during any one day; or (ii) aggregating to more than ₹.2,50,000 during the period 9.11.2016 to 30.12.2016.|
|11.||Purchase of bank drafts or pay orders or banker’s cheques from a banking company or a co-operative bank to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act).||Payment in cash for an amount exceeding ₹.50,000 during any one day.|
|12.||A time deposit with. — (I) a banking company or a co-operative bank to which the Banking Regulation Act, 1949, applies (including any bank or banking institution referred to in section 51 of that Act); (ii) a Post Office; (iii) a Nidhi referred to in section 406 of the Companies Act, 2013; or (iv) a non-banking financial company which holds a certificate of registration under section 45-IA of the Reserve Bank of India Act, 1934, to hold or accept deposit from public.||Amount exceeding ₹.50,000 or aggregating to more than ₹.5,00,000 during a financial year.|
|13.||Payment for one or more pre-paid payment instruments, as defined in the policy guidelines for issuance and operation of pre-paid payment instruments issued by Reserve Bank of India under section 18 of the Payment and Settlement Systems Act. 2007, to a banking company or a co-operative bank to which the Banking Regulation Act, 1949. applies (including any bank or banking institution referred to in section 51 of that Act) or to any other company or institution.||Payment in cash or by way of a bank draft or pay order or banker’s cheque of an amount aggregating to more than ₹.50,000 in a financial year.|
|14.||Payment as life insurance premium to an insurer as defined in clause (9) of section 2 of the Insurance Act, 1938.||Amount aggregating to more than ₹.50,000 in a financial year.|
|15.||A contract for sale or purchase of securities (other than shares) as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956.||Amount exceeding ₹.1,00,000 per transaction.|
|16.||Sale or purchase, by any person. of shares of a company not listed in a recognized stock exchange.||Amount exceeding ₹.1,00,000 per transaction.|
|17.||Sale or purchase of any immovable property.|
Amount exceeding ₹.10,00,000 or valued by stamp valuation authority referred to in section 50C of the Act at an amount exceeding ₹.10 lakh.
|18.||Sale of Purchase, by any person, of goods or services of any nature other than those specified at SL. No. 1 to 17 of this Table, if any,||Amount exceeding ₹.2,00,000 per transaction.|
6. Intimation of PAN in Certain Cases and Obligation of the Person to Whom the PAN is Intimated
(i) Obligation of a person receiving any sum/income/amount from which tax has been deducted at source [Section 139A(5A)]:
Every person receiving any sum or income or amount from which tax has been deducted under the provisions of Chapter XVIIB, shall intimate his permanent account number to the person responsible for deducting such tax under that Chapter.
(ii) Obligation of a person who has deducted the tax at source [Section 139A(5B)]:
Where any sum or income or amount has been paid after deducting tax, every such person deducting tax shall quote the PAN of the person to whom sum/income/amount has been paid by him in:
(a) the statement of perquisites furnished to the employee in accordance with the newly inserted Section 192(2c);
(b) all certificates of TDS furnished under section 203;
(c) all statements of TDS under section 200(3) to any income-tax authority.
However, the Central Government may notify different dates from which the provisions of this section 139A(5B) shall apply in respect of any class or classes of persons.
|The above sections 139(5A) & (5B) shall not apply in case of a person. (a) whose total income is not chargeable to tax; or (b) who is not required to obtain PAN under any provisions of the Income-tax Act. such person will be required to furnish a declaration referred to in section 197A in the prescribed form to the effect that the tax on his estimated total income of the previous year will be nil.|
(iii) Obligation of a Buyer, Licensee, Lessee or Seller of Alcoholic Liquor, Timber or any other Forest Products referred to in Section 206C
(a) Obligation of the Buyer or Licensee or Lessee [Section 139A(5C)]:
Every such buyer, licensee or lessee shall intimate his PAN to the person responsible for collecting such tax.
(b) Obligation of the person responsible for Collecting Tax [Section 139A(5D)]:
Every person responsible for collecting tax under section 206C shall quote the PAN of every buyer, licensee or lessee: —
(i) in all certificates furnished to the buyer/licensee/lessee under section 206C;
(ii) in all statements furnished under section 206C(3) to an income-tax authority.
(iv) Inter-Changeability of PAN & Aadhaar and mandatory quoting in prescribed transactions [Section 139A(5E)]
Notwithstanding anything contained in this Act, every person who is required to furnish or intimate or quote his permanent account number under this Act, and who, ––
(a) has not been allotted a permanent account number but possesses the Aadhaar number, may furnish or intimate or quote his Aadhaar number in lieu of the permanent account number, and such person shall be allotted a permanent account number in such manner as may be prescribed;
(b) has been allotted a permanent account number, and who has intimated his Aadhaar number in accordance with provisions of section 139AA (2) (relating to linking of Aadhaar with PAN), may furnish or intimate or quote his Aadhaar number in lieu of the permanent account number.
Permanent Account Number (PAN) under Section 139A – Who can Apply PAN? Which Transactions needs quoting of PAN and in which cases PAN intimation is required.
7. PAN Card Correction / Modification
1. Making changes or Correction in PAN data
Suppose an applicant needs to change or correct a data on their PAN card. They will need to follow a process to get it done. Mentioned below are the steps that the applicant needs to follow:
- First, they will have to visit www.myutiitsl.com and click on the CSF Form that states ‘Request for New PAN Card or/and Changes or Correction in PAN Data’.
- Once the form is filled up, the applicant can click on the submit tab.
- Once the fee is paid, the applicant will be given an acknowledgement number.
- The applicant is expected to keep the acknowledgement number handy to check the status of the correction application.
To check the correction application status, the applicant needs to visit www.trackpan.utiitsl.com. Then they will have to key in the acknowledgement number of their application and hit the submit tab. The status of their application will be shown on the screen of their computer.
2. Supporting Documents for Change or Correction in PAN card details
- In the case of Name Change after marriage:
- Marriage certificate,
- wedding invitation card,
- publication of name changes in a gazette, and
- a copy of passport showing spouse’s name should be submitted.
- Individuals must submit proof of publication of name-change in gazette,
- Companies must submit Registration Certificate for name change,
- Partnership firms should submit revised partnership deed, and
- Limited Liability Partnership must submit ROC for name change.
- Change in date of birth for individuals and change of incorporation for companies should be supported with documents containing the correct date.
- The contact address mentioned in the application form will be updated in the Income Tax Department database.
3. Documents required to support changes in PAN Card details
Any changes in personal information on a PAN should be supported by relevant documents. The table below highlights the documents needed for a particular change request
|Change request||Supporting documents|
|Change in name of individual||Name change certificate from a gazetted officer/name change publication in official gazette|
|Change in date of birth||ID proof with correct date of birth|
|Change in name of females (due to marriage)||Marriage certificate/invitation card/certified copy from gazetted officer|
|Change in name of company/firm||Certificate from registrar of Companies/updated partnership deed|