All You Need to Know About PAN Card

A PAN card (Permanent Account Number) is an important identification document issued by the Income Tax Department to all taxpayers in India. It consists of a 10-digit alphanumeric identification number, which helps to store all the information of anindividual who pays taxes under a Single PAN number. It is also used for smooth financial transactions, making the process easy for banking, business registration, secure information for government purposes, filing income tax, and monitoring the legal funding of a single person.

In this blog, we will cover all the major details of a PAN card's uses, including its format, key features, importance, and benefits. Stick to this blog for updates on the Indian PAN card.

What is the History of the Indian PAN Card

Before the introduction of the PAN card, Indian citizens used to pay taxes by a GIR number, which was allocated manually under the supervision of an evaluating officer. However, it is not perfect because it has a high chance of mistakes and miscalculations. In some tax assessments, numerous incidents occurred, and subsequently, the Concept of a PAN card was introduced in India. It was introduced by the Government of India in 1972 and became statutory under section 139A of the Income Tax Act of 1961. However, after a few years, the PAN Card was made mandatory for every Indian tax-paying person in 1976.

PAN Card Information

Here is the detailedPAN Card informationgiven below:

1. The full name of the PAN card holder.
2. The father's name of the PAN card holder.
3. 10-digit alphanumeric PAN number.
4. PAN full form: Permanent Account Number.
5. Full signature of the PANcard holder.
6. Date of birth of the PAN card holder.
7. PAN cardholder's photo.
8. Tag of Income Tax Department with the hologram of the Government of India.

PAN Number Format

A PAN card contains highly sensitivetax-related informationof an individual and serves as an identification document forfiling ITRs, banking, and smooth financial transactions. Here is your PAN Number format in detail given below.

• Name of the Individual PAN cardholder or company.
• Father's name on the PAN card. (Only applicable for the individual PAN cardholder).
• Date of birth of the individual cardholder, or Date of registration for the company.
• A 10-digit alphanumeric PAN number shows unique information about the PAN cardholder.
• The first three letters are alphabetical and contain three letters from A to Z.
• The fourth letter represents the taxpayer category.

Here are the following entities with their respective characters.

• A- Association of Persons.
• B- Body of Individuals.
• C- Company.
• D- Firms.
• G- Government.
• H- Hindu Undivided Family.
• L- Local Authority.
• J- Artificial Judicial Person.
• P- Individual.
• T- Association of Persons for a Trust.

• The fifth letter shows the PAN cardholder's surname's first letter.
• The remaining are the random letters and characters. The first four numerals are between 0-9, and the last one is an alphabet chosen randomly.
• A PAN card also has the signature of the individual for verification.
• On the PAN card, you will see the photo of the PAN cardholder (for companies or firms, there is no photo).

Who can Apply for PAN Card in India

Here are the eligibility criteria to apply for a PAN card in India.

• For individuals with a high income who exceed the Income tax slabs.
• If any individual is earning a taxable salary from India.
• Individuals who have a business or profession and have sales or income of more than 5 lakh annually.
• For individuals registered under a union territory's or a state's general sales tax law or central sales tax law.
• For individuals or anyone involved in financial transactions,PAN card information is required.
• For the charitable trust to file IT returns (4A) according to Section 139.
• For the import and export code.
• For the individual who is paying excise duty.
• For individuals who receive payment afterTDSdeductions.
• Individuals with taxable income in India are required to pay service tax.
• An individual who issues invoices with Rule 57AE.
• NRIs with valid earnings in India.
• Trust and association with a valid certificate of registration can apply for a PAN card.

To apply for a PAN card or to learn more about PAN card 2.0, please visit our official website, Visament. 

What are the Uses of PAN Card in India 

A PAN card can be used for many identity purposes as well as financial purposes. Here are some of the uses of a PAN card given below. 

• You can use a PAN card For Identity purposes. 
• PAN card can be used as proof of address. 
• PAN card is used for filing IT returns. 
• For the registration of a business. 
• To open bank accounts, such as NRO account or NRE account. 
• To get a phone connection or a gas connection. 
• To make investments in mutual funds and shares. 
• For depositing cash in a Bank account above 50,000/-INR. 
• To purchase any vehicles other than two wheels. 
• For international travel costing more than 25,000/- INR, you need to provide your PAN card details. 
• For doing a bank transaction above 10,000/-INR. 
• To transfer funds outside India. 
• For making payments of more than 5 lakhs. 
• To purchase bonds and shares of at least 50,000/- INR. 
• For making payments in hotels or restaurants above 25,000/- INR. 

Why PAN Card is Important

Here are some of the major importance of a PAN card which you should know as a PAN cardholder. 

• A PAN card is an identification document and is used for various identity and financial purposes, like filing ITRs and easy financial transactions. 
• A PAN card enables individuals to open bank accounts easily and facilitates smooth financial transactions.
• PAN cards are an important factor for your credit reports. Your rejected credit and debit card applications will affect your credit reports negatively.
• To apply for any type of loan, you will need to provide your valid PAN card information. 
• If any person is selling their property that is worth more than 5 lakhs, then both buyers and sellers are required to give their PAN card details for the smooth transaction of property according to the Indian law. If there is a case of joint ownership, then the PAN card numbers of the owners are required for the sale and purchase of property. 
• To purchase any jewellery above the price of 5 lakhs, you need to provide your PAN card information. 
• For any post office deposits of more than 50,000/-INR, PAN data is required.
• For doing digital payments of more than 20,000/- INR, you need to submit your PAN card information.
• To purchase any vehicles except for 2-wheelers, you need to provide your PAN card information. 
• To open any demat account or trading account, you will need to have a valid PAN card. 
• You need to submit your PAN card information to invest in any mutual funds and bonds. 
• You need to submit your PAN card information for buying premium insurance of more than 50,000/- INR. 
• A PAN card information is required for foreign currency exchange with local currency. 
• You need to provide your PAN card information for accounting and tax purposes for a salaried person in India. 

What is the Benefits of PAN Card in India

Here are some of the benefits of a PAN card that you can enjoy given below: 

• For Filing ITRs: One of the major reasons for the PAN card is to file the income tax returns by individuals and entities. The PAN card serves as the primary purpose, facilitating smooth financial transactions for individuals and firms. 
• Proof of Identification: APAN card is also used for identification purposes in various fields. PAN card acts like the Aadhaar card and the Voter ID in various financial departments and organizations. 
• Tax Deductions: If you have a PAN card linked with your bank account, then you will get the annual interest earnings on savings deposit of more than 10,000/- INR, then the bank will only cut TDS of 10 %, and if you don't have a valid PAN card, then TDS cut will be 30%. 
• Getting Income Tax Refund: Sometimes, the TDS that is supposed to be deducted is more than the actual amount. So, to get the excess tax paid, taxpayers need a valid PAN card linked with their bank account. 
• Starting a Business or Company: If any person is starting a business or a company, then they should have a valid PAN card in the name of the entity, and a Tax Registration Number (TRN) is required for a business only if the entity has a valid PAN number.