Despite the common misconception, the PAN Card has been a requirement by the Government of India for quite some time. It is not a recent regulation as many people believe. However, it is now a mandatory requirement. In this article, we provide you with an overview, including its present-day implications. As well as the process involved if you are unsure whether you already hold an existing PAN from previous years.
Also, inline with the importance of PAN, the card contains crucial details including the name, date of birth, and photograph of the cardholder. It helps establish a person’s identity and facilitates smooth financial operations. Therefore, if you’re in process of completing an Indian financial transaction, you should ensure your PAN is active and up to date.
Below are some common questions and previous articles that can help in understanding PAN requirements.
- What documents are required to apply?
- How long does it take to be issued?
- Is it possible to make changes to the details after it has been issued?
- Can a Foreign Citizen or NRI apply?
- Can I re-apply for PAN if I’m not sure whether I already have one?
- What is the correct AO code for a Foreign Citizen?
- Do I apply for PAN as an NRI or Foreign Citizen?
Overview of PAN Card
- PAN stands for Permanent Account Number
- Its inception was in the 1970’s inline with the Income Tax Act of 1961 regulations
- It is a regulatory requirement by the Income Tax Department Government of India
- It acts as a unique identification system designed to track and monitor financial transaction
- It became mandatory to quote your PAN from 2005. Prior to this, it was not mandatory under certain parameters
- Essential for various financial undertakings such as opening a bank account, filing income tax returns, making high-value transactions, and more
- PAN was previously paper-based. It is now paper and electronic-based
- A new PAN can be applied for from outside of India.
- PAN application is different for an Indian resident and a Foreign Citizen
PAN Card Obtained Before 2000’s
After the year 2005, it became mandatory to have a PAN (Permanent Account Number) as per the Government of India’s guidelines in certain financial transactions. Failing to provide PAN meant not complying with the regulatory requirements. It is essential to register for a PAN card if you are an Indian resident or non-resident who carries out taxable transactions within the country’s jurisdiction. One of the most significant areas where PAN is necessary is during the purchase or sale of Indian properties.
For example, an individual obtained a paper-based PAN in 1978. The individual is now a foreign citizen and needs a PAN to complete their property sale in India. However, the individual is unsure if they still hold a PAN, which is causing unnecessary delays in the completion of their property sale.
If you find yourself in a situation where you are unsure whether a PAN card was issued to you, there are a few steps you can take to clarify. Firstly, you can visit the Income Tax Department’s online portal, provide your information, and check if a PAN card has been allotted to you. Alternatively, you can submit an application to the local jurisdictional office in India of your area to request them to verify if a PAN card has been issued to you in the past. Thirdly, you may have an individual to act on your behalf in your locality in India.
Should you apply for PAN again if you are not sure if you’ve been allotted PAN?
No, you should ideally only apply for PAN if you do not already hold one. If you decide to apply again, the Indian authorities may require further time to clarify whether you are eligible to apply or not. If not, then you would need to initiate due process with your local jurisdiction in India. A competent CA may also assist in such a process.
Essential Use of PAN in Indian Property Transactions
PAN is an essential requirement when it comes to property transactions in India. It serves as a unique identification number that helps track and monitor property sales and acquisitions, ensuring transparency and compliance with tax regulations. Furthermore, a competent CA will ensure that your property sale proceeds formalities are fulfilled inline with the regulatory requirements.
When buying or selling property in India, both the buyer and the seller are required to provide their PAN numbers during the registration and documentation process. This helps the government keep a record of property transactions and ensures that the parties involved are accountable for their tax liabilities. Also, the TDS required to be filed by you would be handled by a CA in India. To ensure a smooth financial transaction when repatriating funds, it is vital that your documentary information is in order.
E-PAN (Electronic PAN) 2024
E-PAN is a digitized format of the Permanent Account Number (PAN) in India, which is a unique identification number assigned to taxpayers. It serves as a digital proof of your PAN and can be used for the same purposes as the PAN Card, including opening bank accounts, filing tax returns, and more. The E-PAN is received on application via your primary email address.
What are the different types of PAN cards?
PAN cards are issued to different tax-paying entities. Based on that, the types of PAN are:
- PAN Card for Indian Individuals
- PAN Card for Indian Companies
- PAN for Foreign Citizens
- PAN for Foreign Companies