Procedure for obtaining PAN and Transactions were quoting of PAN is compulsory

Obtaining a Permanent Account Number (PAN) is a straightforward process in India. The Income Tax Department has made provisions for both online and offline applications. Following is the step-by-step procedure to obtain a PAN:

Procedure for Obtaining PAN

1. Choose Application Type:
   • Form 49A: For Indian citizens.
   • Form 49AA: For foreign nationals.
2. Online Application:

Visit the official portals of NSDL (https://www.tin-nsdl.com/) or UTIITSL (https://www.utiitsl.com/), which are authorized by the Income Tax Department. Select the ‘Application for PAN’ option and choose the relevant form (49A or 49AA). Fill in the form with details like name, date of birth, address, contact details, etc.

3. Document Submission:

Submit the required documents, which typically include proof of identity, address, and date of birth. These can be Aadhaar card, passport, voter ID card, driving license, etc. For online applications, these documents can be uploaded digitally.

4. Payment of Fees:

Pay the application fee, which varies depending on whether the communication address is within India or outside India.

Payment can be made via credit/debit card, net banking, or demand draft.

5. Acknowledgment:

On successful payment, an acknowledgment slip is generated. Keep this slip for future reference.

6. Physical Documents (if required):

In some cases, you might need to send physical documents to the NSDL/UTIITSL office. If so, the acknowledgment, along with the documents, should be sent within 15 days of the online application.

7. Processing and PAN Card Dispatch:

Once the application and documents are verified, the PAN is processed and dispatched to the address provided.

Transactions where Quoting of PAN is Compulsory

The Government of India has made it mandatory to quote the PAN for certain transactions to prevent tax evasion and track high-value transactions. Some of these transactions include:

• Opening of Bank Accounts: PAN is required for opening a new bank account, whether it’s a savings account, current account, or fixed deposit account.
• Sale or Purchase of Motor Vehicles: Required for transactions involving the sale or purchase of a vehicle other than two-wheelers.
• Property Transactions: Mandatory for sale or purchase of immovable property valued at ₹10 lakh or more.
• Deposits with Banks and Post Offices: Required for deposits totaling ₹50,000 or more in a day with a bank or post office.
• Foreign Travel: Mandatory for payment of ₹50,000 or more for foreign travel, including fare and payment to forex dealers.
• Securities Transactions: Required for opening a Demat account, purchasing bonds, debentures, or shares of a company amounting to ₹1 lakh or more per transaction.
• Credit or Debit Cards: PAN is needed for applying for a credit or debit card.
• Mutual Fund Investments: Required for investing ₹50,000 or more in mutual funds.
• Insurance Payments: Mandatory for payments of ₹50,000 or more in a year towards life insurance premiums.
• Fixed Deposits: Required for making fixed deposits exceeding ₹50,000 with a financial institution.
• Cash Payments: Required for cash payments exceeding ₹2 lakh for goods and services.

Importance of Compliance

Complying with these PAN requirements is important to avoid legal repercussions and also facilitates smoother processing of financial transactions. It helps the Income Tax Department in keeping track of major financial transactions, thereby reducing the chances of tax evasion.