All about PAN

1. PERMANENT
ACCOUNT NUMBER
(PAN)
S
U
B
T
I
T
L
E

2. PAN
 Permanent Account Number (PAN) is a ten-digit alpha-
numeric number, issued by the Income Tax Department.
Each assesse (e.g., individual, firm, company, etc.) is issued a
unique PAN.
 PAN enables department to link all transactions of the
‘person’ with the department.
 These transactions include tax payments, TDS credits, returns
of income / wealth / gift, specified transactions, etc.
 All existing assessees or taxpayers or persons who are
required to file a return of income, even on behalf of
others, must have a PAN.

3. .
.
• It has been made compulsory since 2005, to
have a PAN number for all those who file
their income tax returns.
• PAN structure is as follows:
AAAAA9999A. First five characters are
letters, next four are numerals, last is a
character letter
• If PAN does not follow the above structure,
PAN will be shown as invalid
• The fourth character of the PAN must be one
of the following, depending on the type of
assesse:

4. .
.
 C – Company
 P – Person
 H – HUF (Hindu Undivided Family)
 F – Firm
 A – Association of Persons (AOP)
 T – AOP (Trust)
 B – Body of Individuals (BOI)
 L – Local Authority
 J – Artificial Judicial Person
 G – Government

5. How to apply for PAN ?
• Individual who is a citizen of India
• HUF, Company registered in India
• Firm and AOP and BOI formed in India
 can apply for PAN by filling up Form 49A: Application for
Allotment of Permanent Account Number (PAN application
form).
 can also apply for PAN online through NSDL-TIN website.
• Individual not being a citizen of India and other assesses who
are registered outside India shall apply for PAN in form No.
49AA

6. .
Cases Under which PAN is compulsory
 His income exceeds exemption limit
 He is liable to pay tax on behalf of other person as a representative
assesse
 If he is carrying on a business or profession and his total sales,
turnover or gross receipts are likely to exceed ₹ 5,00,000 in any
financial year
 He is required to furnish a return u/s 139(4A)
 He is entitled to receive any sum or income or amount, on which
tax is deductible at source

7. As per Central Government notifications the
following persons also must have a PAN
If a person is,
 Exporter or importer, or
 An assesse under Central Excise Rules, 1944, or
 Issuing invoice under Rule 57E requiring registration under
Central Excise Rules, 1944, or
 An assesse under Service Tax, or
 An assesse under the Central Sales Act or a value added tax
law of a state or Union Territory

8. Once a Permanent Account is allotted, such number shall be quoted in all
Returns, correspondence with Income Tax Authorities challans for payment
and in all documents prescribed by the board.
Quoting PAN is compulsory in following transactions w.e.f. 1.1.2016 (Rule
114B)
I. 1. Immovable property
a. Sale or purchase exceeding ₹ 10 lakh
b. Properties valued by Stamp Valuation Authority
at amount exceeding ₹ 10 lakh
2. Motor vehicle (other than 2 wheeler): All sales or purchase
3. Time deposits at banks, co-operative societies, post office,
a. Exceeding ₹ 50,000
b. Deposits aggregating to ₹ 5 lakh during the year
4. Sale or purchase of securities (other than shares): If value exceeds ₹ 1 lakh
.

9. 5. Opening an account (other than time deposits) with a banking
company
or co-operative banks: Basic savings bank deposit account excluded
6. Hotel or Restaurant: cash payments exceeding ₹50,000
7. Cash purchase of Bank draft, banker’s cheque: exceeding ₹ 50,000
8. Cash deposit with banking company and co-operative society: exceeding
₹50000
9. Foreign travel: Cash payment in connection with foreign travel or purchase of
foreign currency: amount exceeding ₹50000 at any one time
10. Credit card/ Debit card: Application to any banking company or co-operative
society
11. Mutual Fund units
12. Opening a Demat account.

10. 13. Purchase or sale of shares of an unlisted company
for an amount exceeding ₹1 lakh
14. Debentures/ Bonds
15. RBI Bonds
16. Life Insurance Premium
17. Cash cards/ prepaid instruments issued under Payment
and Settlement Act
18. Purchase/ sale of goods or services other than specified in 1-17:
Exceeding ₹2 lakh per transaction
.

11. If any minor enters into any aforesaid transaction and does not have any
income chargeable to tax, he shall quote PAN of his father or mother and
shall make a declaration in Form No. 60
The provisions of this rule shall not apply to following class/ classes of
persons
 Central Govt./ State Govt.
 Consular offices
II. Any person receiving any sum or income or amount from which tax is
deducted at source, shall intimate PAN to person responsible for TDS
III. Where any sum or income or amount has been paid after TDS, every
person deducting tax shall quote PAN of person to whom such income
has
been paid by him in following documents:
.
• .

12. a. The statement issued u/s 192 (2C) regarding perquisites and profits in
lieu of salary
b. All certificates furnished in accordance with provisions of se 203
c. All return delivered in accordance with provisions of sec 206 to any
income tax authority
d. All statements prepared and delivered u/s 203 (3) regarding TDS
IV. Every buyer or licensee or lessee referred to in sec 206C will intimate
his PAN at person collecting tax at source
V. Every person collecting tax at source u/s 206C shall quote PAN of every
buyer or licensee or lessee referred to in sec 206C in following
documents

13. a. All certificates furnished to the buyers or licensee or lessee in accordance
with provisions of sec 206C
b. All returns delivered in accordance with the provisions of sec. 206C to
any income tax authority
c. All statements prepared and delivered u/s sec 206C regarding tax
collection
at source
If a person does not have a PAN;
1. Minor to quote PAN of parent or guardian to open a Bank a/c referred in
(c) and (f)
2. A person who does not have a PAN and enters into any transaction
aforesaid shall file declaration in Form No. 60
.
.
.

14. 3. Persons having agricultural income and having no other income
chargeable to income tax to make a declaration in Form No. 61
However, provisions of sec 139A are not applicable to
a. Non residents
b. payment made by central govt., state govt.
If a person without any reasonable cause fails to apply for PAN
within the prescribed time or fails to quote it on the relevant
documents, the assessing officer shall impose a penalty of a sum of
₹ 10,000 u/s 272B