PAN CARD

Permanent Account Number or PAN, as it is commonly called, is a means of identifying various taxpayers in the country. PAN is a unique identification number assigned to Indians, mostly to those who pay tax. The PAN system of identification is a computer-based system that assigns unique identification number to every Indian tax paying entity. Through this method, all tax related information for a person is recorded against a single PAN number which acts as the primary key for storage of information. This is shared across the country and hence no two people on tax paying entities can have the same PAN.

The PAN card in its present form was first introduced in 1972, as a way to overcome these problems. Initially a voluntary process, it was made mandatory for all tax paying individuals in the country in 1976.

The initial PAN number allotments were made manually, and to avoid duplication, each ward/circle received a certain set of numbers. This series was abandoned in the year 1995 due to a host of problems associated with it.

An individual can also use his/her PAN card as a proof of identity and proof of age. Being a government-issued card, it is accepted as ID proof for everything from buying a vehicle to applying for a loan.

It is generally adults over the age of 18 years who apply for a PAN card. However, a PAN card can also be applied for by a student.

Type of Applicant

Company

Copy of certificate of registration issued by Registrar of Companies.

Partnership Firm

Copy of certificate of registration issued by Registrar of firms or Copy of Partnership Deed.

Limited Liability Partnership

Copy of Certificate of Registration issued by the Registrar of LLPs

Association of Persons (Trust)

Copy of trust deed or copy of certificate of registration number issued by Charity Commissioner.

Association of Person, Body of Individuals, Local Authority, or Artificial Juridical Person

Copy of Agreement or copy of certificate of registration number issued by charity commissioner or registrar of cooperative society or any other competent authority or any other document originating from any Central or State Government Department establishing identity and address of such person.

Having no office of their own in India:

Company/Firms/Limited Liability Partnership/AOP (Trusts)/AOP/ BOI/Local Authority/Artificial Juridical Person

(1.1) Copy of Certificate of Registration issued in the country where the applicant is located, duly attested by “Apostille” (in respect of the countries which are signatories to the Hague Convention of 1961) or by the Indian Embassy or High Commission or Consulate in the country where the applicant is located or authorised officials of overseas branches of Scheduled Banks registered in India.
(1.2) Copy of registration certificate issued in India or of approval granted to set up office in India by Indian Authorities.

Application for allotment of PAN
(Form 49 A)

This application should be used when the applicant has never applied for a PAN or does not have PAN allotted to him.

Request for New PAN Card or/and Changes or Correction in PAN data

This application should be used when PAN has been allotted already to applicant but a new PAN card is required or when data associated with the PAN (e.g. name of applicant / date of birth / address) is required to be updated in the records of Income Tax Department.

Application for allotment of PAN
(Form 49AA) - applicable for foreign citizens

This form should be used when the applicant has never applied for a PAN or does not have PAN allotted to him. An applicant can visit Income Tax Department (ITD) website to find whether a PAN has been allotted to him or not.

Advantages of having PAN card:

  • For payment of direct taxes
  • To file income tax returns
  • To avoid deduction of tax at higher rate than due
  • To enter into specific transaction such as:
    • Sale or purchase of immovable property valued at Rs 5 lakh or more
    • Sale or purchase of a vehicle other than a two wheeler
    • Payment to hotels or restaurants an amount exceeding Rs 25,000 at any one time
    • Payment in cash an amount exceeding Rs 25,000 in connection with travel to any foreign country
    • Payment of an amount of Rs 50,000 or more to the Reserve Bank of India for acquiring bonds
    • Payment of an amount of Rs 50,000 or more to a company or an institution for acquiring bonds or debentures
    • Payment of an amount of Rs 50,000 or more to a company for acquiring shares
    • Any mutual fund purchase
    • Deposit exceeding Rs 50,000 with any single banking institution in 24 hours.
    • Payment exceeding Rs 5 lakh for purchase of bullion and jewellery

Essential Elements of a PAN Card for a Partnership Firm:

Before getting into partnership firm, there is need of some essential elements without which it can’t be called as partnership. Below mentioned are some of the essential elements required:

  • Contract of Partnership
  • Number of Persons
  • Agreement to carry on business
  • Sharing of Profits
  • Mutual Agency in Partnership

Essential Elements of a PAN Card for a Company:

The government of India has made PAN mandatory for all entities that are generating income in the country, whether it is a company, an HUF, a partnership firm or a trust. Having a PAN is beneficial for the company in a number of ways, such as –

  • PAN is basically your company’s tax identity.
  • PAN is used by the Income Tax Department to track all the financial transactions. Even if you do not fall in the tax bracket, you are required to possess PAN.
  • If companies do not have PAN and are generating income, it is considered as withholding of information from the government.
  • PAN will help a company in filing Income Tax Returns and in getting different types of invoices and remittances.
  • PAN will help a company to register Good and Service Tax Identification Number (GSTIN)

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