All You Need to Know About PAN Card: Eligibility Criteria and Importance in India

PAN_Card_Eligibility_Requirement_India

A PAN (Permanent Account Number) card is an individual, entity, or organization’s unique identifying number issued by the Indian Income Tax Department. The eligibility conditions for obtaining a PAN card differ based on the type of client wanting to apply.

Every taxpayer in India, including individuals and businesses, is required to have a PAN card. It is needed for financial transactions such as opening a bank account, investing, purchasing or selling real estate, or applying for loans.

A PAN card allows the Income Tax Department to trace an individual’s or entity’s financial transactions, decreasing the possibility of tax evasion. PAN card users are also obliged to file annual income tax returns, which assists the government in tracking tax compliance.

As a result, anyone who intends to conduct financial operations in India must obtain a PAN card.

Eligible for PAN Card Application

The Indian Income Tax Department provides PANs (Permanent Account Numbers), which are 10-digit unique identifying numbers. The following are the eligibility requirements for obtaining a PAN card:

Individual

Anyone, whether a resident or non-resident of India, can apply for a PAN card.

Hindu Undivided Families (HUF)

HUFs can apply for a PAN card independently of its members.

Minors

Minors are also eligible to apply for a PAN card, and their parents or guardians may do so on their behalf.

Mentally handicapped Individuals

Individuals with mental disabilities can also apply for a PAN card, and their guardians can do that on their behalf.

Partnership Firm

Partnership firms can apply for a PAN card in their own name.

Limited Liability Partnership (LLP)

LLPs can apply for a PAN card with their own name. [Read more about LLP Here.]

Trusts

PAN cards can be obtained by trusts, whether public or private.

Companies

A PAN card can be obtained by any company, public or private.

Local Authorities

Municipalities, Panchayats, and other similar bodies are eligible to apply for a PAN card.

Association of Persons (AOP)

PAN cards can be obtained by AOPs such as clubs, societies, and other similar organizations.

Artificial Judicial Person

A PAN card can be obtained by any artificial judicial person, such as a court or tribunal.

Documents Required for Indian Citizens to get PAN

For an Indian citizen to register for a PAN, the following documents are required:

Proof of Identity

As proof of identity, any of the following documents may be submitted.

  • Aadhaar Card issued by the Unique Identification Authority of India.
  • Voter ID card issued by the Election Commission of India.
  • Passport.
  • Driving License.
  • Ration card with applicant photograph.
  • Arm’s license.
  • Pensioner card with applicant photograph.

Proof of Address

As proof of address, any of the following documents may be submitted.

  • Aadhaar Card issued by the Unique Identification Authority of India.
  • Voter ID card issued by the Election Commission of India.
  • Passport.
  • Driving License.
  • Property Tax Assessment Order.
  • Electricity Bill (Not older than three months).
  • Landline telephone or broadband connection bill (Not older than three months).
  • Water bill (Not older than three months).
  • Consumer gas connection card or book or piped gas bill (Not older than three months).
  • Bank account statement (Not older than three months).
  • Depository account statement (Not older than three months).
  • Credit card statement (Not older than three months).
  • Domicile certificate issued by the Government.
  • Employer’s certificate in original.

Proof of Date of Birth

Any of the following papers can be used to prove applicant date of birth.

  • Birth certificate issued by the Municipal Authority, or any office authorized by the Registrar of Births and Deaths or the Indian Consulate to issue birth and death certificates.
  • SSLC Book/Certificate.
  • Passport.
  • Certificate of identity signed by a Gazetted Officer.
  • Driving License.

Note: The above documents must be self-attested and accompanied by two current passport-sized photos.

Eligibility Criteria and Documents Required for Foreign Citizens / Entities

Foreign Citizens/Individuals

Foreign citizens and persons with a source of income in India may apply for a PAN card. The following documents must be included with your application:

Proof of Identity

Passport, OCI (Overseas Citizen of India) Card, or any other national ID proof.

Proof of Address

Utility bills, bank statements, or rental agreements are all acceptable forms of address proof.

Foreign Entities

If a foreign entity, such as a company, firm, or trust, has a commercial or financial transaction in India, they can apply for a PAN card. The following documents must be included with your application:

Certificate of Registration

Foreign entity registration certificate issued by the competent authorities in the nation where the entity is registered.

Proof of Address

Any address proof such as utility bills, bank statements, or rental agreements.

Proof of Identity

Passport of the authorized signatory.

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Why is a PAN Card required?

A PAN card is required for multitude of reasons:

  • It is required for financial transactions such as opening a bank account, making investments, purchasing or selling real estate, or applying for loans.
  • It assists the Income Tax Department in tracking an individual’s or entity’s financial transactions, minimizing the possibility of tax evasion.
  • PAN card users are obliged to file annual income tax returns, which assists the government in tracking tax compliance.
  • It can be used as a valid ID proof for a variety of purposes, including applying for a passport, a loan, or a credit card.

To summarize, a PAN card is a required document for anyone wishing to do financial activities in India, and it supports in tracking financial transactions and guaranteeing tax compliance.