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Articles on PAN

  1. IT returns filing
  2. Opening a bank account
  3. Applying for a credit/debit card
  4. Buying/selling a vehicle
  5. Acts as a proof of identity
  6. Applying for loans/insurance
  7. Buying/selling/renting property in India
  8. Useful in currency conversion
  9. Used in the purchase of any precious metals

PAN(Permanent Account Number) card and income tax

Importance of PAN card for income tax authorities

  1. Used as an identity proof
  2. Used to determine which income tax slab is applicable to an individual/company
  3. Makes it easier for the authorities to track income earned by individuals/companies

Amendments to PAN rules

  1. Individuals making transactions of more than INR 50,000 on hotel bills and foreign travels are required to furnish their PAN card
  2. PAN card is mandatory for purchase of jewelry worth more than 2 lakhs
  3. PAN cards are necessary for buying immovable property worth more than INR 50,000
  4. PAN cards are mandatory for making cash deposits worth more than INR 50,000

Changes in PAN card transactions

To streamline financial transactions in the country, the Government of India made some changes in the PAN card transactions above INR 2 lakhs and it's effective since the beginning of the year 2016. The main objectives of the changes introduced in PAN card were to curb the black money flow and widen the taxpayer’s base.

PAN card was made mandatory for the following financial transactions-

  1. Sale and purchase of immovable property worth more than INR 10 lakhs.
  2. PAN card is mandatory for the purchase of four wheeler, however, it's not mandatory for the sale/purchase of a two-wheeler.
  3. It is necessary for an individual to own a PAN card for opening a bank account.
  4. Cash payments of more than INR 50,000 during foreign travels require the individual to own a PAN card.
  5. It is necessary for a policy-owner to mention his/her PAN details if the premium tends to exceed more than INR 50,000.
  6. ANy fixed deposit in a bank account exceeding an amount of INR 50,000 needs to be backed by PAN details.
  7. Quoting of PAN details is necessary for an individual making a cash deposit of more than INR 50,000 in a single day.
  8. Furnishing a PAN card is also mandatory for an individual buying gold jewelry worth more than INR 2 lakhs
  9. An individual who wishes to purchase stocks in an unlisted company or open a DEMAT account needs to own a PAN card

Difference between PAN, TIN and TAN

PARAMETER

PAN

TAN

TIN

Issuing Agency

Income Tax Department

Income Tax Department

Commercial Tax Department of the respective state

Code type

10 digit alphanumeric code

10 digit alphanumeric code

11 digit numeric code (first 2 digits are the state code)

Code content

The first 5 digits are alphabets representing various information, followed by 4 numbers and an alphabet

A TAN is composed of 4 alphabets, followed by 5 numbers, with an alphabet as the last digit

A TIN is composed of 11 numbers

Purpose

PAN acts as a universal identification code for financial transactions

Streamline deduction and collection of tax at source

Track VAT related activities in the country

Who should own it

Every taxpayer/assessee

Every individual/entity who has to deduct or collect tax at source

Any dealer or trader who is liable to pay VAT

Laws which account for it

Section 139 A of the IT Act of 1961

Section 203A of Income Tax Act of 1961

Different states have different Acts under which TIN is applicable

Fines/Penalties

A penalty of Rs 10,000 can be imposed for failure to comply with the rules

A penalty of Rs 10,000 can be imposed for failure to comply with the rules

Penalties vary from state to state

Form to be used for application

Form 49A (Indians), Form 49AA (Foreigners)

Form 49B

Forms vary from state to state

Documents required to apply

Valid ID proof, address proof, photographs (in case of individuals) and proof of age (date of birth)

None. In case of online application, the signed acknowledgement needs to be submitted

Proof of registration, PAN, ID proof of owner, etc. (documents required are likely to vary depending on the state in which an entity applies)

How many can one own?

One

One

One

Cost of applying

Rs.107 if the communication address is located inside India and Rs.989 if the address is outside India

Rs.55 plus service tax

Varies from state to state

Grievances associated with PAN

  1. Incorrect name on PAN card
  2. Incorrect address on PAN card
  3. Wrong photograph on PAN card
  4. PAN not received after submitting the PAN application
  5. Permanent Account Number received but card not received

The grievances mechanism of Income Tax Department is robust. It allows the PAN card holder to post queries and grievances associated with PAN. The procedure for voicing grievances linked with PAN is described below-

  1. Visit official PAN Grievances webpage.
  2. Choose the nature of the complaint.
  3. Enter the PAN number.
  4. Choose the portal through which you applied for PAN (UTIITSL/NSDL).
  5. Fill in your personal details like name, father’s name, date of birth.
  6. Share your email for correspondence.
  7. Enter the date when you applied for PAN.
  8. Enter the grievance in detail.

Penalty for Multiple PAN cards

Owning a PAN card is mandatory for a working individual/company in order to keep a track of their financial transactions. An individual owning multiple PAN card could be penalized since it is illegal under the laws stated by the government and approved by the income tax authority to be in possession of more than a single PAN card.

An individual/company owning multiple PAN cards is penalized by imposing a fine of INR 10,000 under section 272B of the Income Tax Act. The high amount of fine poses as a deterrent to individuals for owning multiple PAN.

How to return PAN?

If you own more than a single Permanent Account Number, then you can return it by any of these methods-

  1. Online surrender - If you wish to surrender your PAN, then you can visit the official website of income tax department and mention details of the PAN that you wish to surrender. On submission, an acknowledgment page would pop-up on the screen which could be treated as the proof of surrendering the particular PAN.

  2. Manual surrender - If you wish to surrender your PAN manually then you can fill the PAN change application form. In the form, you must mention the PAN that you wish to retain and the PAN that you wish to surrender under column 11 of the form. A copy of the form must be submitted to the assessing officer of the jurisdiction under which your PAN was issued.

PAN AIN Registration

AIN or Account Information Number is a seven-digit identification number issued by the Income Tax Department. It is mandatory for an Accounts Office to have an account identification number for the submission of form 24G.

Steps for AIN registration

  1. Visit official NSDL webpage
  2. Choose form 24G
  3. Download ‘AIN application form’ under ‘form 24G’
  4. Fill the AIN application form
  5. Click on submit

After filling up the AIN registration form, an individual is supposed to provide the preferred user ID, password and provide details regarding the security question.

Common mistakes that should be avoided while applying for PAN card

  1. Sometimes individuals provide their signature in the incorrect spaces. On the PAN application form, the applicant is supposed to sign across their photographs and in the space provided.
  2. Signing in blue ink could also result in the rejection of PAN application.
  3. Using initials instead of full name is one of the common mistakes that can be rectified easily by the PAN applicants.
  4. Attaching the scanned copies of photographs instead of passport sized photographs is another common mistake made by the applicants. Since scanned copies of the photographs make the identification of the applicant difficult, it is important to attach a passport-sized photograph on the application.
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