Team AckoJul 19, 2023
In India, every individual or non-individual, including foreign citizens/entities, earning taxable income, must possess a Permanent Account Number (PAN) card. This 10-digit alpha-numeric code is where all tax-related information of a person or entity is linked and stored. However, obtaining this requires careful consideration of specific eligibility criteria and documentation requirements. Read ahead to uncover more, as this article will give you an overview of PAN card eligibility.
Here are the categories of Indian citizens who can apply for a PAN card, provided they fulfil specific requirements.
Individuals: A citizen (individual) of India can apply for a PAN card. They need to furnish essential documents regarding their identity, address, etc.
Hindu Undivided Family (HUF): As a separate legal entity, an HUF can apply for a PAN card to carry out financial transactions. The head of the family must initiate the application on behalf of the HUF and submit the required documents.
Minors: The minimum age for PAN card application is eighteen. However, parents or guardians of individuals below eighteen can also apply for a PAN on their behalf. Minors may require a PAN if they are nominated for a property or if their parents plan to make investments in their names. During the application process, the guardian of a minor must submit their own documents along with the child's birth proof. Moreover, the minor's Aadhaar number should be mentioned in the application form.
Individuals that are mentally retarded (mental disabilities): Even individuals with mental disabilities can apply for a PAN card. In cases where they are unable to apply themselves, their representatives can do so on their behalf.
Artificial Judicial Persons: To do so, they need to provide either their registration certificate or relevant government-issued identity and address documents.
Below is a list of entities eligible to apply for a PAN card for Indian companies.
Partnership Firm: Partnership firms need to submit a copy of their registration certificate/partnership deed.
Limited Liability Partnership (LLP): LLPs can apply after providing Registrar-of-LLPs issued registration certificate copy.
Trusts: Trusts can apply for a PAN card by submitting their Certificate and Deed of registration number issued by the charity commissioner.
Companies: As part of the application process, they must register with the State Registrar of Companies, and providing the registration number is mandatory. Additionally, they need to submit a Registrar-of-companies issued registration certificate copy.
Local Authorities: Local authorities are required to present a copy of the agreement during the PAN card application process.
Association of Persons: Registered associations must submit a copy of their registration certificate when applying for a PAN card.
Foreign citizens intending to engage in any financial transactions in India must apply for a PAN card by providing valid documents. They should fill out Form 49AA and ensure they meet the PAN card eligibility, age, and documentation requirements.
The documents for PAN application are as follows. A combination of these documents may work.
Person of Indian Origin card
Overseas Citizen of India card
Taxpayer Identification Number
Citizen Identification Number
Bank account statement.
Non-Resident External (NRE) account statement.
Certificate featuring the foreigner’s residential status issued by police authorities.
Registration certificate containing a residential address (Indian) issued by the Foreigner's Registration Office.
Copy of visa grant or a contract or letter of appointment.
Here are the documents Foreign Companies need to provide along with the PAN application form.
Registration certificate issued outside India (copy).
Registration certificate issued in India (copy).
Here are the entities that do not need a PAN card.
Those minors that are not liable for paying tax on income can use the PAN card of their parents/guardians transactions.
NRIs do not need it for certain transactions.
Individuals who do not have taxable income are not required to apply for a PAN card.
Here are some of the important uses of a PAN card.
It is mandatory for all individuals and entities filing income tax returns in India. It helps in tracking and recording tax-related information.
It serves as an official proof of identity and is widely accepted as a valid identification document.
To open a new bank account or a depository account (such as a Demat account).
When applying for credit cards or bank loans.
For property transactions with a valuation of Rs. five lakh or more.
Any payment exceeding Rs. twenty five thousand at a restaurant.
Depositing an amount of Rs. fifty thousand or more in a bank account.
For the sale or purchase of any motor vehicle, except two-wheelers.
Purchases of jewellery above the prescribed limit.
Yes, a PAN card is mandatory to open a bank account in India. The Income Tax Department has made it essential to link bank accounts to PAN to ensure better tracking of financial transactions and income tax-related activities.
The major reasons for requiring a PAN card for bank account opening are as follows.
Income Tax Compliance: Linking the bank account to PAN helps the tax authorities monitor the financial transactions and income tax returns of individuals, ensuring proper tax compliance.
Tax Refunds: If you are eligible for tax refunds, they will be directly credited to the bank account linked to your PAN.
Reporting high-value transactions: Banks are required to report certain high-value transactions to the Income Tax Department, and PAN facilitates this reporting.
Prevention of Tax Evasion: By linking bank accounts to PAN, it becomes easier to identify and prevent tax evasion and undisclosed income.
As per Section 160 of the Income Tax Act, there is no minimum age requirement to obtain a PAN card. This means that all individuals, both Indian and foreign citizens (including minors), as well as entities, are eligible to apply for a PAN card.
Indian companies should submit Form 49A to meet the eligibility requirements during a PAN card application. Form 49A is specifically designed for Indian citizens, including companies, individuals, and Hindu Undivided Families (HUFs), applying for a PAN card.
Yes, NRIs (Non-Resident Indians) are eligible to have a PAN card. They can apply for it using Form 49AA, which is specifically meant for foreign citizens/entities.
Minors are also eligible to have a PAN card. While it is not mandatory for minors to have taxable income, a PAN card becomes necessary in certain situations. For example, if a minor is nominated for a property or if investments are made in their name, it may be required. Parents/guardians can apply on behalf of the minor using Form 49A and providing necessary documents. The minor's Aadhaar number should be mentioned in the application form.
Once a PAN card is issued, it remains valid for a lifetime, and individuals are not required to apply for a new one. However, if a person wants to obtain a new one or needs to make modifications to their existing PAN details, they can apply for a duplicate PAN card or update their details through the official channels. In such cases, the old one should be surrendered or returned to the concerned authorities to ensure compliance with the law and to avoid any legal issues.
Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.
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