It is that time of the year when talks about income tax and filing returns are heard in every home and office. Did you know that one cannot file IT returns without PAN and without linking it to Aadhar card? PAN card? What's that? The blue card that finds a place in your parents’ wallet, along with credit and debit cards, is the PAN card. Take a look at it. You will find a photo of the card holder, name, surname and an alpha-numeric number and date of birth.
What is PAN?
Permanent Account Number (PAN) is a code issued by the Department of Income Tax. It is a 10-digit number-and-alphabet combination and is unique to each individual. Identify this number on your parent's card. It would be something like this - ABCDP4678H. This number enables the department to monitor financial transactions of the holder. It also helps the Income Tax department to keep track of the tax paid or evaded by an individual. The first ever such card was issued in 1964. It is also issued to foreign nationals such as investors.
Why is it necessary to have PAN?
It is mandatory for an individual to declare his/her PAN when opening a bank account, receiving taxable salary or professional fees, while making certain high-value transactions, while buying a property or a car worth over a certain limit, buying or selling shares or mutual funds, applying for a visa/passport, making payment of income tax or filing tax return, and while applying for a bank loan. Through it, the Income Tax department is kept in the loop of one's income, property details, investment and tax payment. It is illegal to evade tax. PAN, thus, acts as an identifier of the person with the tax department
Who must have PAN?
All taxpayers, a producer or manufacturer of excisable goods, anyone who intends to make financial transactions where quoting PAN is mandatory and even those who furnish a return of income, on behalf of others, must obtain PAN. Companies and trusts should also have PAN.
In 2008, a three-month-old baby from Orissa got PAN, after a trust signed the baby up for modelling. Last year, a five-day-old Bihar girl became the youngest PAN card holder in the country.
What are the agencies involved?
The card is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT). The UTI Investors Services Ltd (UTIISL) and National Securities Depository Limited (NSDL) are the authorised agencies to accept and process PAN application forms.
How to apply?
Application for PAN card are available at PAN Facilitation centres, located in cities and towns, wherever Income Tax offices are located. 'Form 49A' are also available online in the websites of the Income Tax Department and NSDL.