Full Form of PAN Card: Permanent Account Number
PAN Card Full Form is Permanent Account Number. PAN is a ten-digit code that is uniquely generated for each citizen of India. It acts as an important proof of identity for all indigenous people, specifically those who pay income tax. The PAN is a peculiar code that consists of an identifier of 10 alphanumeric characters by nature. The Code has issued those judicial entities identified under the Income Tax Act of 1961.
The Income Tax Department of India issues the PAN card under the auspices of the Central Board of Direct Tax (abbreviated as CBDT). The PAN card is an essential proof of identification. The issuance of the PAN card is made to foreign nationals, eg investors, but the issuance is subject to visa regulations and therefore does not act as proof of Indian citizenship for such nationals.
Importance of PAN
The PAN card is extremely important as it is mandatory for financial transaction purposes, for example, bank account opening, receipt of professional fees or taxable salary, asset purchase, etc., particularly high value transactions.
The main objective of the PAN card is to achieve universal identification with respect to financial transactions and to ensure the prevention of tax evasion by controlling financial transactions, particularly those that have a high net worth and impose a great influence on the economy of India.
The reason why the PAN is an important document is that it is necessary to carry out almost all important financial transactions, whether it is opening a new bank account or buying and selling commercial goods. It prevents any tax evasion as it is important for all high-value transactions, be it the transfer of the monthly salary or the earnings of a personal business.
Now that we have explored some basic information about the PAN, it is important to specifically discuss some important facts about it because it is one of the strongest identification tests in the country. So here are five points about PAN, which every Indian should know.
Structure and related provisions
The following points must be noted down:
The relevant provision in this regard is Section 139A of the Income Tax Act of 1961. Failure to comply with the mandate of the provision will result in a penalty.
The structure of a typical PAN consists of five characters, first, followed by four numbers, and then followed by the last letter of the character.
The first three characters or letters of the PAN form a sequence of alphabets.
The fourth character of the PAN provides information related to the category of PAN holder. The characters indicate the following: A indicates Association of Persons (abbreviated as AOP); B indicates body of individuals (abbreviated as BOI); C indicates company; F indicates Firm; G indicates Government; H indicates Hindu undivided family (abbreviated as HUF); L indicates local authority; J indicates an artificial legal person; etc.
The fifth character in a PAN is actually the first character, which includes the owner’s last name or the name of the Trust, Entity, Company, etc.
The last character placed in a PAN is an alphabetical check digit.
Recently, the Government of the Union has launched an online service known as “Know your PAN” with the purpose of verifying or validating new or existing PAN numbers.
The appearance of a typical PAN card
A typical PAN card comes in a standard plastic card that has a picture of the PAN holder’s face, the date of issue, the date of birth, and a hologram tag. The hologram label acts as a security feature. The holder’s address is not mentioned on the PAN card. When a PAN card is issued to a minor (which is issued through UTI-ITSL), the card does not have the photograph or the date of issue. Before 2001, PAN cards that were issued were in black and white. Those cards have poor image quality and were printed on laminated paper. Therefore, a PAN card today is much more convenient and has a high quality.
Prescribed applications for PAN
It should be noted that there are two categories of PAN applications:
PAN Assignment Related Application: This category of application form is for those who have never applied for a PAN card or do not have any PAN card in their name. To verify if a PAN card has been assigned, the applicant can consult the official website of the Income Tax department, which is www. Incometaxindia.gov.in where you can check the status of the application. There are two types of forms under this, namely: Form 49A, which is for Indian citizens, living inside and outside of India, and Form 49AA, which is for foreign citizens.
Request for amendments to an existing PAN or issuance of a new PAN: There are prescribed forms in this regard that must be filled out when the applicant seeks a new PAN or wants some variations on their existing PAN.
It should be noted that Rule 114 (4) of the 1962 Income Tax Rules establishes the documents that must be provided for the purposes of address or date of birth or identity verification. There is an online application facility available to obtain a PAN. The following steps should be followed when applying for a PAN online:
Access websites of UTIITSL or NSDL e-Gov.
Submit necessary details online on the forum.
After having inputted details, make necessary payment of the prescribed fee.
On successful submission and payment, a receipt is produced.
Get the printout of the receipt and paste recent pictures on it and sign on the space that is provided on that receipt.
After that, the applicant must forward the same to UTIITSL or NDSL e-Gov along with necessary documents mentioned above.
Keep a track on the status of your application on the aforementioned website.
Operative models of PAN
The whole framework relating to the issue of PAN and its verification, maintenance and delivery functions on Public-Private Partnership (abbreviated as PPP) model such as that of Passport Seva Kendra (abbreviated as PSK) for the purposes of effectiveness, efficiency and economy.
NSDL e-Governance Infrastructure Ltd, which was previously known as National Securities Depositories Ltd), along with UTI Infrastructure Technology Services Ltd (abbreviated as UTIITSL) is responsible for the management of processing of PAN application, collection, handling and verification of documents such as identity proofs, seeking clarification from applicants, printing of the PAN card and other related services.
Many people have criticized this model on the ground that handling over of such essential functions to private bodies would amount to an infraction of privacy but the settled opinion is that there is no such issue of violation. It is to be noted that applicants must seek services only from those PAN centers that have been duly authorized by UTIITSL or NSDL e-Gov, which are guided by the Income Tax Department itself.
PAN Card Concerns
There are some concerns regarding the PAN. As of 2014, 170 million PAN cards have been issued but only 30 million of them are contributors. Although the PAN is a unique identification number, it is misleadingly obtained by scammers. It is not legal to possess multiple PAN cards, and if one of them does, it will have to impose a sanction under the law. There have been cases where illegal immigrants have been able to obtain PAN cards and this has created a lot of concern among legislators.
How to get a PAN Card?
The PAN is issued by the Income Tax Department of India. Just as applying for a passport is a voluntary action, obtaining a PAN is also voluntary. To obtain it, it is necessary to complete a form that is available online, send the necessary documents to the NSDL office with proof of identity and a recent photograph. It takes a maximum of one month for the unique PAN number to be generated and mailed to your address. It should be noted that the PAN is exclusive to the holder and its validity is for life throughout the country. Once you get a PAN, it will be valid until you live. Regardless of whether your address and workplace change, the PAN remains the same.