What is a PAN Card and its Uses?

Permanent Account Number or PAN card is a crucial piece of document when it comes to taxation. It also serves as identity proof so you can avail of many 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.

PAN stands for Permanent Account Number, a unique 10-digit alphanumeric code the Income Tax Department assigns to taxpayers. It is issued as a laminated plastic card and includes key details about the individual, such as:

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.

• The first three characters of the PAN are alphabetic and range from AAA to ZZZ.
• The fourth character indicates the cardholder's status, such as:

• ‘P’ for Individual
• ‘C’ for Company
• ‘F’ for Firm/Limited Liability Partnership
• ‘H’ for Hindu Undivided Family (HUF)

• The fifth character represents:

• The first letter of the individual's last name
• The first letter of the entity’s name for non-individuals

• The next four characters are sequential numbers ranging from 0001 to 9999.
• The tenth character is an alphabetic check digit.

You can apply for a new PAN card online or request changes or corrections to your existing PAN card. To do so, you can use either the Protean portal or the UTITSL portal. The application fee is ₹93 for an Indian communication address and ₹864 for a foreign one. Below are the general steps to apply for a PAN card:

1. Visit the Protean or UTITSL portal and select the ‘New PAN’ option.
2. Complete Form 49A by entering the required details.
3. Pay the applicable fee using a Debit/Credit Card, NetBanking, or Demand Draft.
4. Upon successful payment, you will receive an acknowledgement receipt.

Your PAN card will be delivered to your registered address within 15 days. Please note you can only hold one PAN card. If you possess more than one under Section 272B of the Income Tax Act, 1961, you may face a penalty of ₹10,000.

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

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 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 that is 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.

The Indian Income Tax Department has introduced a new e-filing portal feature allowing PAN allotment based on Aadhaar. However, specific conditions must be met to use this facility, which 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.

PAN is necessary for numerous financial transactions and 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: 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.