What is Pan Card and its Uses?

11 January, 2024

Permanent Account Number or PAN card is a crucial piece of document when it comes to taxation. It also serves as identity proof so that you can avail of a multitude of financial services, including opening a bank account, investing in Mutual Funds, or applying for a Credit Card. In this article, you can get more information on what PAN Card is and its uses.

What is a PAN Card?

PAN is short for Permanent Account Number. It is a unique 10-digit alphanumeric number issued to taxpayers by the Income Tax Department. Issued in the form of a laminated plastic card, the PAN card consists of details like the following of a person:

1. Unique PAN number

2. Full name of the PAN cardholder

3. Full name of the PAN cardholder’s father

4. Date of birth of the PAN cardholder

5. Digital signature of the PAN cardholder

6. Photograph of the PAN cardholder

7. QR code
   
   

To understand the significance of each character in your PAN card, let’s take an example—ABCDE1234F.

1. The first 3 characters of PAN represent the alphabetic series running currently from AAA to ZZZ.

2. The 4th character of the PAN represents the status of the cardholder; for example, ‘P’ stands for individual, ‘C’’ stands for Company, ‘F’ stands for firm/limited liability partnership, ‘H’ stands for Hindu Undivided Family (HUF), etc.

3. The 5th character represents the first letter of the last name of the individual and the first letter of the name in case of non-individual.

4. The next 4 characters are sequential numbers that can run from 0001 to 9999.

5. The 10th character of the PAN is an alphabetic check digit.
   
   

How to Apply for a PAN Card?

You can apply for a fresh PAN card online in addition to raising requests for changing or correction of some information on the PAN card. You can use the Protean portal or UTITSL portal for online application by paying the ₹93 application fee for an Indian communication address and ₹864 for a foreign communication address. Here are general steps for making a PAN card application:

1. Visit the Protean or UTITSL portal and navigate to the ‘New PAN’ or similar option.

2. Fill out form 49A – enter the information as instructed.

3. Pay the fees via Debit or Credit Card, NetBanking, Demand Draft, etc.

4. You will receive an acknowledgement receipt upon successful payment.
   
   

You shall receive your physical copy of PAN at your mailing address within 15 days. Note that you can hold only one PAN card. Under section 272B of the Income Tax Act, 1961, you will be liable to pay ₹10,000 as a penalty otherwise.

What Is PAN Card Used For?

PAN card is used for easy retrieval of information of the PAN cardholder and matching their investments, borrowings, and other business activities. The Income Tax Department can identify or link all transactions of the cardholder with the department using their PAN. PAN is mandatory for the following:

• Sale or purchase of a motor vehicle or any other vehicle with more than two wheels

• Opening a bank account

• Applying for a credit or debit card

• Opening a demat account

• Paying ₹50,000 for something in cash

• Depositing more than ₹50,000 during any one day with a bank
  
  

Who Needs a PAN Card?

The following group of people are required to have a PAN card:

• An individual who wishes to perform specified financial transactions that require them to quote PAN.

• An individual who is carrying on any profession or business with a total sale, total turnover, or gross receipts exceeding ₹5,00,000 in any year.

• An individual with a total income exceeding the maximum amount exempted from income tax.

• Charitable trusts that need to file for income tax return under section 139(4A).

• Every non-individual with financial transactions exceeding ₹2,50,000 in the fiscal year.
  
  

What Is Instant PAN?

The Income Tax Department of India has recently launched a new functionality on the e-filing portal according to which a PAN can be allotted on the basis of their Aadhaar number. However, there are certain conditions to avail of this facility that are listed below:

• They should not be a minor on the date of application for PAN,

• They have not been allotted a PAN before,

• Their mobile number is linked to their Aadhaar number, or

• Their Aadhaar card enlists their complete date of birth.
  
  

Financial transactions made easy with PayZapp

PAN is necessary for numerous financial transactions and for completing KYC processes for payment applications like HDFC Bank’s PayZapp. When you complete your KYC, you can conduct a wide range of transactions with the PayZapp app, be it utility bill payments, mobile recharges, insurance payments, Mutual Fund payments and more. PayZapp also allows you to send and receive money and make offline payments by scanning QR codes. Link your HDFC Bank Cards and make OTP-less payments.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.