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Introduction
PAN is set in the form of a 10-digit unique identification alphanumeric number (containing both alphabets and numbers) assigned to Indians, mainly to those who pay tax. Permanent Account Number or PAN is a mode of identifying taxpayers across the country.
Permanent Account Number or PAN Card is a nationalized identity card. Without a PAN, you will not be able to carry out any financial transaction. It is the Indian Income Tax Department that allocates this 10-digit alphanumeric and unique account number to a tax-paying person, company or HUF. It has lifetime validity. In this article, we will explore important aspects around the eligibility for a PAN Card.
Know All About PAN Card Eligibility
All Indian citizens having a valid source of income and necessary proofs (as prescribed by the Income Tax Department) are eligible to apply for PAN card. Applying for and getting a PAN card or Permanent Account Number is mandatory for every taxpayer or the person who needs to file an income tax return on behalf of self or others. Any individual/non-individual (including the foreign citizens/entities) earning taxable income in India must have a PAN card. Here are some of the activities for which PAN card is mandatory.
- To file income tax returns
- It serves as a proof of identity
- To open a new bank account and depository account
- To apply for credit card and bank loans
- For sale or purchase of immovable property with Rs. 5 lakhs and more valuation
- Any payment to restaurants exceeding Rs.25,000
- Depositing into bank account an amount of Rs.50,000 and more
- For sale or purchase of a car or any other vehicle (apart from two-wheeler)
- Payment of an amount Rs. 50,000 and more towards investment purpose
- For jewellery purchase after the prescribed limit
PAN Card Eligibility Criteria to Apply Online (For Indian Citizens)
Indian citizens/companies/entities need to apply for PAN card by using Form 49A. Mentioned below is important information about PAN card eligibility criteria and supported documents required for Indian citizens.
- Individual: Applicant should be an Indian citizen with valid identity proof, address proof and date of birth proof (Checklist of acceptable proofs is available in the website)
- Hindu Undivided Families: An HUF is a separate entity. Hence, the PAN card can be applied in HUF’s name to enter into financial transactions. Head (Karta) of the family can apply for PAN card on behalf of the family by furnishing his proof of identity, proof of address and DOB proof along with providing fathers name and addresses of all the co-partners of HUF. The affidavit needs to be made by the Karta of HUF mentioning all the details.
- Minors: Minors can also apply for PAN card. PAN card is a mandatory requirement in case of making them nominee for a property and also to make investments in their name. Parents of a minor can sign the form 49A on behalf of them. Proofs of parents are to be submitted along with the date of birth proof of child while submitting the form. Aadhaar number of minors needs to be quoted in the form.
- Mentally Challenged Individuals: If needed, mentally retarded individuals can also obtain a PAN. Application has to be submitted by their representatives.
- Partnership Firm: Copy of certificate of registration issued by Registrar of Firms or Copy of Partnership Deed needs to be submitted to obtain a PAN card.
- Limited Liability Partnership: Copy of Certificate of registration issued by the Registrar of LLPs needs to be submitted to get a PAN card.
- Trusts: Trusts are eligible to apply for PAN card by furnishing trust deed and certificate of Registration number issued by charity commissioner.
- Companies: PAN card for companies can be applied online. Companies need to register with the state Registrar of Companies before applying for PAN card as registration number is mandatory. Copy of Certificate of Registration issued by the Registrar of Companies needs to be furnished along with the form.
- Local Authorities: Local authorities can also place an application for obtaining PAN by submitting a copy of the agreement.
- Association of Persons: Registered associations can apply for PAN card by submitting a copy of their registration certificate.
- Artificial Judicial Person: They are eligible to apply for PAN card by submitting the registration certificate or government establishing identity and address of such person.
PAN Card Eligibility and Documents Required for Foreign Citizens / Entities
Foreign citizens/entities can use Form 49AA to apply for a PAN card. Here are some of the basic eligibility criteria for pan card that have to be met to obtain a PAN card:
- Foreign Citizens/Individuals: Foreign individuals who intend to do any financial transactions in India has to apply for PAN card by submitting valid ID and address proof along with the date of birth proof. They can furnish a copy of below documents as proof.
Proof of Identity:
- Passport/PIO card/OCI card
- TIN (Taxpayer Identification Number) or CIN (Citizenship Identification Number) attested by the Ministry of External Affairs or High Commission or Indian Embassy. The applicant can even get this attested by the consulate of the country where he/she resides or from an authorized official of Indian scheduled bank branch situated overseas.
Proof of Address:
- Passport/PIO/OCI
- TIN (Taxpayer Identification Number) or CIN (Citizenship Identification Number) attested by the Ministry of External Affairs or High Commission or Indian Embassy. The applicant can even get this attested by the consulate of the country where he/she resides or from an authorized official of Indian scheduled bank branch situated overseas.
- Bank statement of account (from the country where he/she resides)
- Bank Statement of account from the NRE (Non-resident External) account held in India
- Certificate showing the residence status in India or residence permit issued in India by the police authorities
- Certificate of registration carrying Indian residential address issued by the Foreigner’s Registration Office.
- Copy of visa granted or a contract or letter of appointment given by an Indian company. Even an address proof letter issued by an Indian employer in original can be produced.
For Foreigners: They are eligible to apply for PAN card by submitting below documents along with PAN Form 49AA.
- A photocopy of Registration certificate issued by the country where the entities are situated duly attested by the Ministry of External Affairs or High Commission or Indian Embassy. An applicant can even get this attested by the consulate of the country where he/she resides or from an authorized official of Indian scheduled bank branch situated overseas.
- A copy of Registration Certificate obtained in India or approval obtained from Indian authorities to set up a branch office in India.
Pan Card Eligibility FAQs
1. Who should apply for a PAN card?
All existing assesses or taxpayers or persons who are required to furnish a return of income, either on behalf of self or others, must obtain PAN. Any person, who intends to enter into economic or financial transactions where quoting PAN is mandatory, must also obtain PAN.
2. Can minor apply for a PAN card?
Section 160 of IT Act, 1961 mentions that a non-resident, minor, lunatic, idiot, and a court of wards and such other persons may be represented through a Representative Assessee. In such cases, application for PAN will be made by the Representative Assessee.
3. Will my PAN card number change if I make a change in my name?
No, your PAN will remain the same even if there is a change in your name as it is a Permanent Account Number.
4. Who should apply for a change or correction in PAN card?
One should make an application when he/she wants to make some changes or corrections in their existing PAN details such as:
- Change in applicant name, on account of marriage or due to spelling mistake
- Change in father's name
- Change in date of birth
5. Can a person obtain or use more than one PAN?
Obtaining or possessing more than one (Permanent Account Number) PAN is against the law.
6. Why is it necessary to have PAN?
You will not be able to file your ITR if you do not present your PAN. All bank accounts not linked with PAN will be deactivated soon. Also, it is necessary to furnish PAN for making cash transactions above Rs 50,000.
End Note
PAN Card is issued to individuals, companies, non-resident Indians or anyone who pays taxes in India. PAN card eligibility is important to read and fulfil before applying for one. Depending on the category of the applicant and the purpose, the eligibility criteria may differ.