Permanent Account Number (PAN)

Applicable Section/Rules/Forms
Section: 139A
Rules: 114, 114B, 114C, 114D
Forms: 49A, 49AA, 60, 61, E-Form SPICe (INC 32) (Under Companies Act 2013)

Mandatory application of PAN when and by whom?

Before 31st May of the relevant Assessment Year where

• Total income of assessee or representative assessee exceeds maximum amount not chargeable to tax during the financial year (for rates of tax to check maximum amount not chargeable to tax)

Before end of Financial Year

• Where total sales, turnover or gross receipts of business or profession exceed or likely to exceed ₹ 500,000 during any financial year
• Charitable/religious trust in case not allotted
• Any person who is entitled to receive any sum or income or amount, which is subject to deduction of tax at source in any financial year

Before exporting or importing

• Exporter or importer who is required to obtain Import Export Code

Before making application for registration under respective tax laws

• Central Excise applicant
• Service Tax applicant
• Central Sales Tax or respective State/Union territory Sales Tax applicant

Every person being a resident (other than an individual) which enters into a financial transaction of an amount aggregating to INR 250,000 or more in a financial year should obtain a PAN. 

Further, a managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer or any person competent to act on behalf of any person refereed above should obtain a PAN.    

Assessing Officer to allot PAN on receipt of voluntary application from the person not falling under any of the above category.

PAN should be quoted on all (Rule 114B)

1. Income-tax Returns, TDS/TCS Statements/certificates,
2. Correspondence with income-tax department,
3. Tax challans,
4. Correspondence, bills, vouchers and other documents which are sent by deductee of tax to deductor,
5. Documents pertaining to prescribed transactions (Rule 114B)
   1. Sale & purchase of motor vehicle which requires registration, other than two wheelers,
   2. Opening account with bank or banking institution,
   3. Application to bank or other company/institution for issue of credit/debit card,
   4. For opening a demat account
   5. Payment in cash against hotel and restaurant bills exceeding ₹ 50,000 at any one point of time,
   6. Payment in cash (including fare, purchase of foreign currency from authorised  person, payment to travel agent or a tour operator) in connection with travel to any foreign country of and exceeding ₹ 50,000 at any one time.
   7. Payment of ₹ 50,000 or more to a mutual fund for purchase of units,
   8. Payment of ₹ 50,000 or more to a company or institution for acquiring bonds, debentures issued by them,
   9. Payment of ₹ 50,000 or more to RBI for acquiring bonds issued by it,
   10. Deposit of cash with bank or banking institution or post office exceeding aggregate of ₹ 50,000 or more during any one day or ₹ 2,50,000 during the period 09thNov 2016 to 31stDec 2016 ,
   11. Payment in cash for purchase of bank draft, pay order to bank or banking institution aggregating of ₹ 50,000 or more, during any one day,
   12. Time deposits with bank or banking institution, Post Office, Nidhi Company, NBFC exceeding ₹ 50,000 per day or ₹ 5,00,000 during a financial year,
   13. Payment in cash / pay order / bank draft / banker’s cheque for amount aggregating to more than ₹ 50,000 in a year for towards cash cards/prepaid instruments issued under Payment & Settlement Act.
   14. Payment of a life insurance premium amount aggregating ₹ 50,000 or more in a year to an insurer,
   15. Entering into contract for purchase or sale of securities (other than shares) exceeding ₹ 100,000 per transaction,
   16. Entering into contract for purchase or sale of unlisted shares exceeding ₹ 100,000 per transaction,
   17. Sale & purchase of immovable property amount exceeding ₹ 10,00,000 or valued exceeding ₹ 10,00,000 as per stamp valuation authority referred in Section 50C,
   18. Sale or purchase of goods and services, other than those specified above, if any, exceeding ₹ 2,00,000 per transaction

Where a person, entering into any transaction referred above, is a minor and who does not have any income chargeable to income-tax, he shall quote the permanent account number (PAN) of his father or mother or guardian, as the case may be, in the document pertaining to the said transaction.

In absence of PAN, person entering into above specified transactions is required to submit declaration in Form No. 60(either in paper form or electroniclally). Form No. 60 has been revised w.e.f. 1-1-2016. The person accepting the declaration shall not accept the declaration where the amount of income of the nature [estimated total income (other than agricultural income)] exceeds the maximum amount which is not chargeable to tax, unless PAN is applied for and its acknowledgement number is duly filled.

Person signing TDS statement, TDS certificate is also required to quote his PAN.

Persons exempted from obtaining PAN

• Central Government, State Government and consular offices in transactions where they are payer.
• Non-resident other than entering into specified transactions (viztransaction specified above 1,2, 4, 7, 8, 10, 12, 14, 15, 16, 17)

PAN Application

• Allotment of PAN is partly outsourced. Application is required to be made in respective forms before Assessing Officer through outsourced agency namely NSDL or UTIITSL.
• Form 49A – Applicable to Indian Citizens (including located outside India)/Indian Companies/Entities incorporated in India/Unincorporated entities formed in India.
• Form 49AA – Applicable to individuals not being a Citizen of India / Entities incorporated outside India / Unincorporated entities formed outside India.
• Application can be made in physical format or electronically.
• New Companies at the time of registration can apply for PAN in Form INC-7 w.e.f. 10-4-2015. However in such case, the Form INC-7 needs to be uploaded at e-Biz website ebiz.gov.in
• In case of change in any particulars submitted at the time of original application, change or correction in PAN application in "PAN Change request form" is required to be filed. For the required changes to be incorporated / updated, relevant check boxes on the left margin of the form are required to be checked.
• "PAN Change request form" can also be used for re-print of PAN card. However, in such case no boxes should be checked.

Application requirements

• Physical application
• Application should be filled with blank ink pen only.
• Physical application should be submitted at any of the TIN facilitation centre/ PAN centre managed by NSDL or UTIITSL.
• Online Application
  • Application can be submitted electronically using interface provided by NSDL or UTIITSL.
  • Where application is submitted online, signed printed copy of the acknowledgment generated online is required to be submitted within 15 days from the date of online application.
  • Post online application (in case submitted with NSDL), acknowledgment can be submitted at Income Tax PAN Services Unit, NSDL e-Governance Infrastructure Limited, 5th Floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune – 411 016. Envelope is required to be superscribed as ‘APPLICATION FOR PAN — Acknowledgment Number’ (e.g. ‘APPLICATION FOR PAN — 881010100000097’).
  • Individual can make online application using Digital Signature
  • Each application should be accompanied with the documents in support of proof of identity and address. Documents required are as under:
    • Individual who is a citizen of India
      1. Proof of identity (POI)— Copy of :—
         • Elector's photo identity card; or
         • Ration card having photograph of the applicant;
         • Passport; or
         • Driving licence; or
         • Arm's licence; or
         • Aadhaar Card issued by the Unique Identification Authority of India; or
         • Photo identity card issued by the Central Government or a State Government or a Public Sector Undertaking; or
         • Pensioner card having photograph of the applicant; or
           • Central Government Health Scheme Card or Ex-servicemen Contributory Heath Scheme photo card; or
           • Certificate of identity in original signed by a Member of Parliament or Member of Legislative Assembly or Municipal Councellor or a Gazetted Officer, as the case may be; or
           • Bank certificate in original on letter head from the branch (along with name and stamp of the issuing officer) containing duly attested photograph and bank account number of the applicant.
             In case of a person being a minor, any of the above documents of any of the parents or guardian of such minor shall be deemed to be the proof of identity.
             

2. Proof of address (POA) —
   • Copy of the following documents of not more than three months old -
     • Electricity bill; or
     • Landline telephone or broadband connection bill; or
     • Water bill; or
     • Consumer gas connection card or book or piped gas bill; or
     • Bank account statement*; or
     • Depository account statement; or
     • Credit card statement; or
   • Copy of,-
     • Post office pass book having address of the applicant; or
     • Passport; or
     • Passport of the spouse; or
     • Elector's photo identity card; or
     • Latest property tax assessment order; or
     • Driving licence; or
     • Domicile certificate issued by the Government; or
     • AADHAR Card issued by the Unique Identification Authority of India; or
     • Allotment letter of accommodation issued by the Central Government or State Government of not more than three years old; or
     • Property registration document; or
3. Certificate of address signed by a Member of Parliament or Member of Legislative Assembly or Municipal Councellor or a Gazetted Officer, as the case may be; or

4. Employer certificate in original.

In case application is made on behalf of a minor, any of the above documents of any parent or guardian of such minor shall the proof of address.

* In case of an Indian citizen residing outside India, copy of Bank Account Statement in country of residence or copy of Non-Resident External (NRE) bank account statements shall be the proof of address.

Proof of date of birth (wef. 10 April 2015) —

1. Birth certificate issued by the municipal authority or any office authorised to issue birth and death certificate by the Registrar of Birth and Deaths or the Indian Consulate as defined in clause (d) of sub section (1) of section 2 of the Citizenship Act, 1955 (57 of 1955); or
2. Pension payment order; or
3. Marriage certificate issued by the Registrar of Marriages; or
4. Matriculation certificate or mark sheet of recognized board; or
5. Passport; or
6. Driving license; or
7. Domicile certificate issued by the Government; or
8. Aadhar card issued by the Unique Identification Authority of India; or
9. Elector's photo identity card; or
10. Photo identity card issued by the Central Government or State Government or Central Public Sector Undertaking or State Public Sector Undertaking; or
11. Central Government Health Service Scheme photo card or Ex-servicemen Contributory Health Scheme photo card; or
12. Affidavit sworn before a magistrate stating the date of birth.

• Additional guidelines for DSC based PAN Application

Hindu Undivided Famiy (HUF)

1. An affidavit by the Karta of HUF stating name, father's name and address of all the coparceners on the date of application
2. copy of any document applicable in the case of an individual specified in serial number A, in respect of karta of the Hindu undivided family, as proof of identity, address and date of birth

• This facility can be used by PAN applicants having a valid class II or III DSC Digital Signature Certificate (DSC) issued to them by authorized Certifying Authority (CA) in India.
• In case of Individual applicants, the DSC of the applicant should be used for digitally signing the application. In case of minor/lunatic/idiot applicants, DSC of the parent/guardian whose details have been furnished as Representative Assessee in the application should be used for digitally signing the application.
• The DSC should bear the name of the applicant / Representative Assessee as mentioned in the application form
• PAN applicants should have scanned image of photograph, signatures and supporting documents i.e. Proof of Identity (POI) /Proof of Address (POA) /Proof of Date of Birth (PODB). The photo/signature and supporting documents should be scanned as per following specifications:

Payment of application fee can be done using Credit card / Debit card or Net banking facility only.

• Company registered in India –
  • Copy of the Certificate of Registration issued by the Registrar of Companies with Corporate identity number allotted .
• Firm (including Limited Liability Partnership formed or registered in India) –
  • Copy of Certificate of Registration issued by the Registrar of Firms/Limited Liability Partnerships; or
  • Copy of Partnership Deed.
• Association of persons (Trusts) formed or registered in India –
  • Copy of trust deed; or
  • Copy of Certificate of Registration Number issued by Charity Commissioner.
• Association of persons (other than Trusts) or body of individuals or local authority or artificial juridical person formed or registered in India –
  • Copy of Agreement; or
  • Copy of Certificate of Registration Number issued by Charity Commissioner or Registrar of Co-operative Society or any other Competent Authority; or
  • Any other document originating from any Central Government or State Government Department establishing Identity and address of such person.

Companies/LLP/Partnership firm/AOP/BOI/Trusts/Local Authority/Artificial Judicial Person having no office of their own in India –

• 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.
• Copy of registration certificate issued in India or of approval granted to set up office in India by Indian Authorities.
• Individuals not being a citizen of India —
  • Proof of identity: —
    • Copy of Passport; or
    • Copy of Person of Indian Origin (PIO) card issued by the Government of India; or
    • Copy of Overseas Citizen of India (OCI) Card issued by Government of India; or
    • Copy of other national or citizenship Identification Number or Taxpayer Identification Number duly attested by "Apostille" or by 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.
  • Proof of address:—
    • copy of Passport; or
    • Copy of Person of Indian Origin (PIO) card issued by the Government of India; or
    • Copy of Overseas Citizenship of India (OCI) Card issued by Government of India; or
    • Copy of other national or citizenship Identification Number or Taxpayer Identification Number duly attested by "Apostille" or by 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; or
    • Copy of bank account statement in country of residence; or
    • Copy of Non-resident External bank (NRE) account statement in India; or
    • Copy of certificate of residence in India or Residential permit issued by the State Police Authority; or
    • Copy of the registration certificate issued by the Foreigner’s Registration Office showing Indian address; or
    • Copy of Visa granted and copy of appointment letter or contract from Indian Company and Certificate (in Original) of Indian Address issued by the employer.

In respect of entities viz. LLP registered outside India, Company registered outside India, Association of persons (Trusts) formed outside India, Firm formed or registered outside India, Association of persons (other than Trusts) or body of individuals or local authority or artificial juridical person formed or any other entity (by whatever name called) registered outside India –

• Copy of Certificate of Registration issued in the country where the applicant is located, duly attested by ‘Apostille’ or by Indian Embassy or High Commission or Consulate in the country where the applicant is located or authorized officials of overseas branches of Scheduled Banks registered in India; or
• Copy of registration certificate issued in India or of approval granted to set up office in India by Indian Authorities.

Other relevant points

• Application should be complete in all respects, including details of Assessing Officer (AO). For non-resident AO code pertaining to International Taxation Directorate should be used and in case if not specified, AO details of International Taxation Directorate, New Delhi would be assigned.
• Individual and HUF applicants can have Address for Communication as Office address. However in such case proof of office address along with the proof of residential address is to be submitted.
• Signature/Left Thumb Impression should only be within the box provided below the photo, on right hand side and on left hand side signature/Left Thumb across the photograph.
• In case application is signed using a left hand thumb impression, it should be attested by a Magistrate or a Notary Public or a Gazetted Officer, under official seal and stamp.
• Proof of identity and address should exactly match with the name and address in application.
• Non-resident applicants mentioning address of ‘Indian tax consultant’ as 'care of" address must also provide original power of attorney notarised/attested by Indian Embassy / High Commission or Consulate located in the country where applicant is located, which specifically mentions that ‘Indian tax consultant’ is authorised to accept notices from Income Tax Department on behalf of the applicant. While filing form applicant’s own name should be filled in name column 14 – Name and address of Representative Assessee, Name of the "Indian tax consultant" should be filled in first line of address column of RA and address of the "Indian tax consultant" should be provided in remaining lines for address as "care of" address.
• However note in form states that column 14 – Name and address of Representative assessee, should be filled in by representative assessee only as specified in Sec.160 of the Income Tax Act, such as agent of NR, guardian or manager of minor, lunatic or idiot, Court of Wards, Administrator General, Official Trustee, Receiver, manager, trustee of a Trust.
• In case the applicant being a foreign citizen who at the time of making the application is located in India provides office address, then it is mandatory to provide following documents as POA for the office address:—
  • Copy of visa granted and
  • Copy of appointment letter/contract from Indian Company and
  • Certificate (in original) of address in India of applicant issued by authorised signatory of employer on employer’s letter head mentioning the PAN of the employer.
  • Copy of PAN card for the PAN mentioned in the employer’s certificate.
• However, if such foreign citizen (applicant) does not have any office in India, but is registered/approved by any competent authority in India, it may provide an Indian address as office address which is mentioned in certificate of registration or approval of the competent authority or the accompanying documents issued by the competent authority to such applicant or in the application made by the applicant before the competent authority.
• ‘Apostille’ documents may be submitted in case person belongs to the country which are signatories to The Hague Apostille Convention of 1961.
• On submission of the application (both online & physical), acknowledgment containing a 15 digit acknowledge number is issued.
• Application can be tracked online or through mobile using acknowledge number.

Processing Fees

• Application processing fees is ₹ 110 ( ₹ 93+18% Goods & Service Tax) with Indian card delivery address and ₹ 1020 [(Application fee ₹ 93 + Dispatch Charges ₹ 771)+ 18% Goods & Services tax] for card with foreign delivery address. Currently out country dispatch is available only for select list of 105 countries.
• Additional surcharge of ₹ 4 (plus GST) is charged where payment is made through Net Banking facility.
• Additional charge of up to 2% (plus applicable taxes) of application fee is charged where online payment is made by using credit card / debit card.
• Online application (Indian address only) payment can be made by
  • Demand draft or
  • Credit /debit card or
  • Net banking
• If communication address is a foreign address, the payment can be made only by way of Credit Card/Debit card and Demand Draft payable at Mumbai.
• Demand draft shall be in favour of ‘NSDL-PAN’ and payable at Mumbai*.
• .
• Applicant’s name and the acknowledgment number should be mentioned on the reverse of the demand draft.
• Persons are allowed to make payment by credit card/debit card/net banking. But such card or account of authorised persons only as under:

* Procedure may vary where application is made through UTIITSL.

Responsibility of Other Party

• Every person who is in receipt of any document specified in Rule 114B shall ensure after verification that PAN has been correctly quoted. In case declaration is received in Form No. 60 is complete.
• Specified person as referred in rule 114D who is in receipt of Form No. 60 shall furnish statement in Form No. 61 to Director/Jt. Director of Income-tax (Intelligence and Criminal Investigation) in two installments.
  • Forms received from 1st April to 30th September —latest by 31st October and
  • Forms received from 1st October and 31st March — latest by 30th April.
• Shall retain Form No. 60 for a period of six years from the end of financial year in which the transaction was undertaken.
• Every person deducting tax at source or collecting tax source shall quote PAN in all returns of tax deducted/collected and in certificate issued by him.

Implication of non-quoting of PAN

• Any person entitled to receive any sum or income or amount on which tax is deductible under Chapter XVIIB is required to furnish PAN to the deductor. If the payee fails to provide PAN to the deductor, tax would be deducted higher of (Sec. 206AA) :
  • The rate mentioned in the relevant provisions of the Act;
  • The rate in force;
  • Twenty per cent.
• Karnataka High Court in case of  A. Kowsalya Bai v. UOI, [2012] 22 taxmann.com 157 (Kar.)has held that S. 206AA of the Act is made inapplicable to persons and read down from the statute for those whose income is less than the taxable limit. The banking and financial institutions shall not invariably insist upon PAN from such small investors as well as from persons who intend to open an account in the bank or financial institution.
• Rate of TDS for non-providing of PAN, may also apply to non-resident payee.
• The provisions of section 206AA is not automatic that a flat rate of 20% shall be deducted wherever PAN is not furnished - Rashtriya Ispat Nigam Ltd. v. ACIT [2016] 65 taxmann.com 292 (Visakhapatnam - Trib.)
• TDS scheme which allows to change only four characters of PAN in revised TDS return - Oil & Natural Gas Corporation Ltd. v. DCIT [2016] 65 taxmann.com 2 (Ahmedabad - Trib.)
• 206AA of the Act does not override the provisions of section 90(2). Hence it was held that payment to non-resident, deductor assessee has correctly applied the rate of tax prescribed under the DTAAs and not as per section 206AA of the Act because the provisions of the DTAAs was more beneficial – DDIT vs. Serum Institute of India Ltd. [2015] 56 taxmann.com 1 (Pune – Trib.)
• Applying the rate of 20% without considering the provisions of DTAA and consequent adjustment while framing the intimation u/s 200A is beyond the scope of the said provision – DCIT v. Infosys BPO Ltd. [2015] 60 taxmann.com 465 (Bangalore - Trib.)
• Non-resident assessee's income exceeds the taxable limit prescribed by the relevant Finance Act are bound and are under an obligation to obtain the PAN and furnish the same to the assessee. For failure to do so, the payer is liable to withhold tax at the higher of rates prescribed u/s 206AA of the Income-tax Act i.e. 20% - Bosch Ltd. v. ITO [2012] 28 taxmann.com 228 (Bangalore – Trib.)
• No certificate for Nil/lower deduction of tax shall be granted u/s 197 unless application bears PAN.
• Declaration provided under section 197A without PAN would be treated as invalid leading to deduction of tax at higher rate.
• In case PAN supplied is invalid or does not belong to the deductee, it shall be deemed as if PAN has not been submitted.
• Penalty u/s. 272B of ₹ 10,000 may be levied in case of each default.
  • Not applying or applying belatedly for allotment of PAN
  • Non quoting of PAN or
  • Fails to intimate PAN or
  • Supplies or intimate false PAN
• The Central Board of Direct Taxes (CBDT) has notified Rule 37BC in the Income-tax Rules, 1962 vide Notification No. 53 /2016, F.No.370 142/16/ 2016-TPL dated 24 June 2016 specifying the conditions to be fulfilled by non-resident deductees to obtain relaxation from higher withholding tax rate under Section 206AA of the Act in the absence of PAN in India.
• The non-resident deducteee has to furnish the following details and documents to the deductor, namely:-
  1. name, e-mail id, contact number;
  2. address in the country or specified territory outside India of which the deductee is a resident;
  3. a certificate of his being resident in any country or specified territory outside India from the Government of that country or specified territory if the law of that country or specified territory provides for issuance of such certificate;
  4. Tax Identification Number of the deductee in the country or specified territory of his residence and in case no such number is available, then a unique number on the basis of which the deductee is identified by the Government of that country or the specified territory of which he claims to be a resident.

Penalty u/s 272B is imposable where assessee failed to mention correct PAN of few deductees in quarterly e-TDS return which in fact were not available with it at relevant time of filing of original TDS statement, but on being show-caused it obtained correct PANs and filed revised statement – ITO (TDS) v. Executive Engineer [2015] 58 taxmann.com 134 (Delhi - Trib.)

PAN issued with erroneous status

Merely because PAN was issued by the Department erroneously, there cannot be any insistence that return should be filed in the same capacity. Erroneous description in the PAN would not change the reality that no such partnership firm ever existed. If there was any inaccuracy, the assessee is required to have got it corrected within a reasonable time - Tulsi Mall (Association of Person) v. CIT [2016] 65 taxmann.com 115 (Gujarat)

PAN as Identity of person

PAN numbers are allotted on the basis of applications without actual de facto verification of the identity or ascertainment of the active nature of business activity. PAN Number is allotted as a facility to revenue to keep track of transactions. The PAN Number cannot be blindly and without consideration of surrounding circumstances treated as sufficiently disclosing the identity of the individual - N. Tarika Property Invest. (P.) Ltd. v. CIT [2014] 51 taxmann.com 387 (SC). Corollary to this would be that in case when PAN is allotted after considering various documentary proof, such PAN may be considered as establishing the identity of the person.

Linking Aadhaar to PAN on the Income Tax E-filing Portal:

Quoting of Aadhaar Card has become mandatory for filing of Income Tax Return for returns filed for A.Ys 2017-18 onwards. The linking of PAN and Aadhaar is mandatory.

Steps to link Aadhaar to PAN:

Login in to e-filing website www.incometaxindiaefiling.gov.in  A window will pop-up to facilitate linking of the two unique identity numbers. Fill in the details. Check that the personal details (name, date of birth, gender) match with those stated in PAN. Click on Link Now and Pan and Aadhaar will be linked only if the details match