A PAN card represents your Permanent Account Number (PAN) which is a 10-digit alphanumeric identifier, issued by the Income Tax Department. Each assessee (e.g. individual, firm, company, etc.) is issued a unique PAN Number. No person who has already been allotted a PAN Number shall apply, obtain or possess another PAN Number.1
Initially, you will have to apply for a PAN Number. When your PAN Number is ready, you will be given a PAN Card with the details of your PAN Number on the card. A PAN Card is accepted as a valid proof of identity anywhere in the country. It can also be used as proof of identity when making an application for a passport, voter ID card, driving licence, electricity connection etc.
You can also download an e-PAN, which is a digitally signed PAN Card issued in electronic format by the Income Tax Department using Aadhaar e-KYC.
PAN Number is a permanent number and once you get a new PAN number, it does not require renewal. However, the details on your PAN Card can be updated.
Hence, you may make an application for:
- A new PAN Card when you already have a PAN Number
- Changes or corrections in your existing PAN Card details. In this case, the new PAN Card issued to you will bear the same PAN Number but with updated information.
You2 have the option of applying for a PAN Number as it is useful while filing taxes, setting up a bank account, etc. However, applying for a PAN Number is not always optional. It is mandatory for all existing assessees or taxpayers or persons who are required to file income returns, even on behalf of others, to have a PAN Number. It is compulsory to quote your PAN Number on return of income tax.
Further, if you intend to enter into economic or financial transactions where quoting PAN Number is mandatory, then you must have a PAN Number. These include:3
- Payment in cash to a hotel or restaurant against a bill/bills at any one time exceeding fifty thousand rupees.
- Payment in cash in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time exceeding fifty thousand rupees.
- Sale or purchase of any immovable property exceeding ten lakh rupees.
- Sale or purchase of goods or services of any nature exceeding two lakh rupees per transaction.
If you are mandatorily required to apply for a PAN Number and you fail to do so, the Assessing Officer may direct you to pay a penalty of Rs. 10,000.4
If you require any additional help and support, please see here.
Read this government resource to know more.
- Section 139A(7), Income-tax Act, 1961
- Section 139A(3), Income-tax Act, 1961
- Rule 114B, Income-tax Rules, 1962
- Section 272B, Income-tax Act, 1961