Who is eligible to apply for a PAN Card in India?

Every person and/or entity who earns a taxable income in India as per the Income Tax Act, 1964 provisions need to obtain a PAN as per Section 139A of the Income Tax Act, 1964. This article, in brief, discusses the persons who are eligible to apply for a PAN in India. Permanent Account Number (PAN) is a ten-digit alphanumeric code issued by the Income Tax Department of India under the provisions of the Income Tax Act, 1964 (“Act”) to individuals (including foreign nationals) and entities earning taxable income in India.

What is PAN?

PAN is a ten-digit alphanumeric code issued by the Income Tax Department to persons eligible under Section 139 (A) of the Act in the form of a laminated card (as shown below), commonly referred to as a PAN Card.

Utility of PAN

The PAN issued by the Income Tax Department enables the Department to identify and link all transactions of the PAN holder with the Department. These transactions include tax payments, TDS/TCS credits, returns of income, specified transactions, correspondences, etc. It also enables easy retrieval of the information concerning the PAN holder and matching of several investments, borrowings, and other business activities of the PAN holder.

Who can apply for a PAN?

As per Section 139 (A) (i) of the Act, the following persons are eligible to apply for a PAN in India:

1. Every person whose total income during the year exceeds the maximum amount which is not chargeable to tax; or

2. Every person who is being assessed on behalf of another where such person’s total income during the year exceeds the maximum amount which is not chargeable to tax; or

3. A charitable trust who is required to furnish return under Section 139(4A) of the Income Tax Act, 1964; or

4. Every person who is carrying on any business or profession whose total sale, turnover, or gross receipts are or are likely to exceed Rs. 5,00,000 in any financial year;

5. Every person who intends to enter into specified financial transactions as mentioned below in which quoting of PAN is mandatory:

1. Opening up of a bank account; or
2. Application for issuance of a debit/ credit card; or
3. Opening of a Demat account with a depository, participant, custodian of securities, or any other person registered with the Securities Exchange Board of India; or
4. Payment in cash of an amount exceeding Rs. 50,000 to a hotel or restaurant against the bill at any one time; or
5. Payment in cash of an amount exceeding Rs. 50,000 in connection with travel to any foreign country or payment for the purchase of any foreign currency at any one time; or
6. Payment of an amount exceeding Rs. 50,000 to a Mutual Fund for purchase of its units; or to a company or an institution for acquiring debentures or bonds issued by it or to the Reserve Bank of India for acquiring bonds issued by it; or
7. Deposits of cash exceeding Rs. 50,000 during any one day with a banking company or a cooperative bank; or
8. Sale or purchase, by any person, of shares of a company not listed in a recognized stock exchange for an amount exceeding Rs. 1,00,000 per transaction or any immovable property for an amount exceeding Rs. 10,00,000 or valued by stamp valuation authority referred to in Section 50C of the Income Tax Act, 1964 at an amount exceeding Rs. 10,00,000; or
9. Sale or purchase of goods or services of any nature other than those specified above for an amount exceeding Rs. 2,00,000 per transaction; or
10. Purchase or sale of any motor vehicle except two-wheeled vehicles.

6. Every non-individual resident person and person associated with them shall apply for PAN if the financial transaction entered into by them during the financial year exceeds Rs. 2,50,000.

Any person wishing to obtain PAN can apply for PAN by submitting the PAN application form (Form 49A/49AA) along with the requisite documents (such as proof of identity, address) and prescribed fees at the PAN application center of UTI Infrastructure Technology and Services Limited (UTIITSL) and National Securities Depository Limited (NSDL). An online application can also be made from the website of UTIITSL or NSDL.