Permanent account number (PAN) is a ten digit alphanumeric identification issued by the Income Tax Department in the form of a laminated card to a person who applies for it.
It’s a unique 10 character alpha-numeric identifier issued to all judicial entities (like an individual, a firm or a company) identifiable under the Income tax act 1961.
Application for a PAN card can be made through National Securities Depository Limited (NSDL) portal or through UTI infrastructure Technology and Services Limited (UTITSL) portal.
As the name suggests the number is permanent and cannot be changed.
Here are five things you need to know before applying for one:
- All the taxpayers usually apply for a PAN. Individuals who do not have a PAN card can use the Aadhaar card to file tax returns after the latest announcement in Budget. It was laid in the budget that PAN and Aadhaar are interchangeable for filing tax returns.
- Any person or entity that would be involved in considerable financial transactions where quoting PAN is compulsory must have a PAN card. Even people who are not carrying out any financial transactions can apply for it voluntarily as it is considered as a significant Identity proof for many purposes.
- Having more than one PAN card is against the law and may attract a penalty of up to Rs 10,000. As per provisions of Section 272B of the Income Tax Act., 1961, a penalty of ₹ 10,000 can be levied on possession of more than one PAN.
- In case an individual possesses more than one PAN, the individual can fill a form and submit mentioning the one PAN number he/she is using and declare that all other numbers would stand invalid. The individual may have to attach a copy of the card along with the form for cancellation.
- Third party verification will be done as per the rules laid by the Income Tax department to verify the identity and address mentioned by the applicant in the form. If the details are found to be fake, suitable action will be taken.