India has a population of 1.2 billion, but very less number of people holds PAN card. In India, only about 2% of the population is paying income tax. Despite such a small number, income tax is the biggest source of income for Indian Government. Thus income tax department wants more and more people to have PAN card. This will help more people to file IT returns, it will eventually increase the revenue of the Government.
Sometime back IT department has included Voter’s ID and Aadhaar card as option for verification. Now as a pilot project they have started issuing e-PAN from 29th June 2018. This facility is for limited period and on a first-come-first-serve basis. The facility is free of cost. It requires a valid Aadhaar card for authentication. Let’s check how one can get an instant ePAN card using Aadhaar card.
Current process of getting a new PAN card takes around 10 to 15 days. That too requires to fill up a lengthy online/offline form, submitting documents of identity and address proof and a payment of fees of Rs. 110. The main benefit for the taxpayer is they get PAN number instantly and free of cost. Before going forward, let’s understand what is PAN card and what all things you need to know about PAN card.
What is PAN card
PAN card or Permanent Account Number is a unique 10 character alpha numeric number issued under section 139A of the Income Tax Act 1961 to all the entities like individual,company,HUF etc. It is considered as one of the main identity proof in India. The PAN card was introduced in 2003 as a unique identifier to track all financial transactions of Indian citizens. You need to furnish the PAN number for opening a bank account, trading in stocks, receiving salary, mutual fund investment or doing any cash transaction worth more than 1 lakh.
Pan card can be applied by filing form no. 49A, which can be done online or offline by filing up the form along with necessary documents. A person cannot have more than one PAN card as per the Income Tax Act. It is a punishable offense and Rs. 10000 or higher penalty can be impose.
Decoding of PAN card
PAN is a ten digit alphanumeric number issued in the form of a tamper proof card by Income Tax Department. The PAN number once allotted to an individual or entity cannot be change even if the name or address is changed across India.
A typical PAN number would look like AAZPK1234K. Below is the logic behind these alphanumeric numbers.
First 3 characters i.e. “AAZ” in the above example are alphabetic series running from AAA to ZZZ.
Fourth letter i.e. “P” represents the type of the PAN holder.
“P” stands for Individual.
“F” stands for Firm.
“C” stands for Company.
“H” stands for HUF.
“A” stands for AOP.
“T” stands for TRUST etc.
Fifth letter i.e. “K” represents the first character of the surname of the Pan holder.
Next four characters i.e. “1234” represents sequential numbers ranging from 0001 to 9999.
Last character i.e. “K” in the PAN number is the alphabetic check digit.
Why PAN Card is Required?
- It is mandatory to quote Permanent Account Number in Income tax return.
- For paying direct tax.
- It helps in deduction of higher tax rate due to non availability of PAN card.
- Benefits of having PAN card
- PAN number can be useful and mandatory for certain transactions in India.
- Purchase or sale of property valued at Rs. 5 lakhs or more.
- Cash payment to anyone amount > 50000 in a single day.
- Mutual fund purchase of any amount.
- Buying a jewellery worth more than 2 lakhs
- Purchase of new vehicle other than two wheeler.
- Filing income tax return.
How you can get your instant e-PAN using your Aadhaar card
- Go to Income Tax India website – https://www.incometaxindiaefiling.gov.in/home
- In the left hand section, click on the apply instant ePAN option.
- Next page will be of terms and condition page, Click “Apply instant e-PAN” button.
- Then the general guideline page will be there. Go through it and click Next.
- Fill the form, you have to mentioned details like name, date of birth, gender and Aadhaar number.
- Upload your signature in a specific format.
- Give consent to access your Aadhaar data from UIDAI and press Submit button.
- you will get the OPT on the registered mobile no. with Aadhaar.
- Based on the details available with Aadhaar data, your e-PAN will be generated.
Points to remember while applying for ePAN
- The person who already has a PAN should not apply for e-PAN card.
- e-PAN is only available for resident individuals, so companies, trusts, HUFs cannot apply for e-PAN.
- You need to have active mobile number which is registered with applicant’s Aadhaar card.
- e-PAN will be generated as per the details of your Aadhaar card. So if there is any discrepancy in the details first you need to update it on the UIDAI website.
- Applicant need to upload a scanned copy of the signature on a white paper with the specific file format i.e. JPEG having dimension – 2 x 4.5 cm.
- Since this is a paperless facility, applicant does not require to send any physical papers.
- On the successful registration, applicant can download the copy of the e-PAN instantly. Hard copy of the PAN will not be sent to applicant.
Hope this helps.