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PAN / TAN

PAN Card is a card issued under Section 139A by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and it also serves as an important proof of identification.It is a unique, 10-character alpha-numeric identifier, issued to all judicial entities identifiable under the Indian Income Tax Act, 1961.The PAN is mandatory for a majority of financial transactions such as opening a bank account, receiving taxable salary or professional fees, sale or purchase of assets above specified limits etc.; especially high-value transactions.

Structure of PAN

  • The PAN structure is as follows: AAAPL1234C: First five characters are letters, next four numerals, last character letter.
  • The first three letters are sequence of alphabets from AAA to ZZZ
  • The fourth character informs about the type of holder of the card. Each holder is uniquely defined as below:
  • A — Association of Persons (AOP)
  • B — Body of Individuals (BOI)
  • C — Company
  • F — Firm
  • G — Government
  • H — HUF (Hindu Undivided Family)
  • L — Local Authority
  • J — Artificial Juridical Person
  • P — Individual
  • T — AOP (Trust)
  • K — Krish (Trust Krish)
  • The fifth character of the PAN is the first character
  • of the surname or last name of the person, in the case of a “Personal” PAN card, where the fourth character is “P” or
  • of the name of the Entity, Trust, society, or organisation in the case of Company/ HUF/ Firm/ AOP/ BOI/ Local Authority/ Artificial Judicial Person/ Govt, where the fourth character is “C” , “H” , “F” , “A” , “T” , “B” , “L” , “J” , “G”.
  • The last character is an alphabetic check digit.

The central government has introduced a new online service called “Know Your PAN” to verify or validate new and existing PAN numbers.Failure to comply with the provisions of Section 139A of Income Tax Act, penalty of 10,000/- for each default is payable u/s.272B by Assessing Officer.

PAN Application

One can apply for PAN by submitting the prescribed PAN application to the authorized PAN agency of the district or through online submission to NSDL, UTI along with 2 recent passport size color photographs, proof of ID, Address and Date of Birth and fee. In case of Re-print (re-issue), a photocopy of the old PAN is also required. It takes about 10–15 days to receive the card.

There are two types of PAN applications:
Application for allotment of PAN: – This application form should be used when the applicant has never applied for a PAN or does not have PAN allotted to him. Applicant may visit ITD’s website www.incometaxindia.gov.in to find whether a PAN has been allotted to him or not.

Following forms have been notified by ITD for submitting applications for allotment of new PAN:
FORM 49A: – To be filled by Indian citizens including those who are located outside India.
FORM 49AA: – To be filled by foreign citizens.

Application for new PAN Card or/and Changes or Corrections in PAN Data:

Those who have already obtained the PAN and wish to obtain the new PAN card or want to make some changes / corrections in their PAN data, are required to submit their applications in the following form prescribed by ITD:
‘REQUEST FOR NEW PAN CARD OR/AND CHANGES OR CORRECTION IN PAN DATA’: – The same form can be used by Indian as well as foreign citizens. A new PAN card bearing the same PAN but updated information is issued to applicant in such case.

PAN for Foreign Citizens

PAN is an important document for foreign citizens also, who wish to undertake business in India or wish to invest in India. Procedure to obtain PAN is same as applicable for Indian citizens. However, the application is required to be filled using Form 49AA meant for foreign citizens and submitted at any of the authorized PAN Service Centre through the authorized representative in India. List of documents applicable for foreign citizens are given below:

Individuals and HUF

Documents accepted as Proof of Identity

  • Copy of passport, or
  • Copy of Person of Indian Origin (PIO) card issued by Government of India, or
  • Copy of Overseas Citizen of India (OCI) card issued by Government of India, Or
  • Copy of other national or citizenship Identification Number or Taxpayer Identification Number duly attested by “Apostille” (in respect of countries which are signatories to the Hague Convention of 1961) or by the Indian Embassy or High Commission or Consulate in the country where the applicant is located or authorised officials of overseas branches of Scheduled Banks registered in India (in prescribed format) .

Documents accepted as Proof of Address

  • Proof of Identity documents mentioned above bearing address of the applicant or
  • Copy of Bank account statement in the country of residence, or
  • Copy of Non-resident External (NRE) bank account statement in India, or
  • Copy of Certificate of Residence in India or Residential permit issued by the State Police Authorities, or
  • Copy of Registration certificate issued by the Foreigner’s Registration Office showing Indian address, or
  • Copy of Visa granted & Copy of appointment letter or contract from Indian Company & Certificate (in original) of Indian address issued by the employer.

For other than Individuals and HUF (Including those having no office of their own in India)
Documents accepted as Proof of Identity & Proof of Address

  • Copy of Certificate of Registration issued in the country where the applicant is located, duly attested by “Apostille” (in respect of the countries which are signatories to the Hague Convention of 1961) or by the Indian Embassy or High Commission or Consulate in the country where the applicant is located or authorised officials of overseas branches of Scheduled Banks registered in India (in prescribed format) ; or
  • Copy of registration certificate issued in India or of approval granted to set up office in India by Indian Authorities.

At present, PAN Service Centres are located in India only. However, foreign citizens may find online mode of application more convenient and easy. The online facility allows payment of fees using credit card option for foreign citizens. Also, the fees charges is reasonable; i.e. 107 if the PAN card is to be received in India and 989 if the PAN Card is to be received at a foreign location.

TAN Stands for Tax Deduction and Collection Account Number. It is a 10 digitalphanumeric number issued to persons who are required to deduct or collect tax on payments made by them under the Indian Income Tax Act, 1961.

Structure of TAN

  • TAN structure is as follows: ANBA99999B: First four characters are letters, next five are numerals, last character is a letter.
  • Each tax deductor is uniquely identified by a TAN.
  • The first three characters represent the city or state where the TAN was issued.
  • And the next 5 characters are numerics

TAN Application

TAN is applied through “Form No. 49B”.
TAN is required to be quoted in all TDS/TCS returns, all TDS/TCS payment challans and all TDS/TCS certificates to be issued. TDS/TCS returns will not be accepted if TAN is not quoted and challans for TDS/TCS payments will not be accepted by banks. Failure to apply for TAN or not quoting the same in the specified documents attracts a penalty of 10,000.

No documents are required to be filed with the application for allotment of TAN. However, where the application is made online, the acknowledgment (a PDF file) which is generated after filling up the form must be forwarded to NSDL.

A TAN application should accompany a ‘proof of identity’ and a ‘proof of address’ (photocopies) of the deductor. In the case of online applications, these documents need to be sent over mail (post/courier) to NSDL – TAN Application division.

When NSDL receives the TAN application along with said documents (either through TIN FC / Online), the details are verified and then sent to the Income Tax Department. Once approved, the Department allocates a unique number, and notifies the applicant through NSDL.

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