Ch.
3: PAN Card and Aadhaar Card
Target:
● Purpose
● Requirement and issuing Body of PAN Card
● PAN and Income Tax
● Aadhaar Card and its Benefits
1. What is PAN?
Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued by the Income
Tax Department.
PAN enables the department to link all financial transactions of the "person”. It also acts as an
identifier for the “person” with the tax department.
A typical PAN is EMMPS2280E
2. What is the purpose of having a Permanent Account Number (PAN)?
It is mandatory to quote PAN on the return of income, all correspondence with any income tax
authority, and challans for any payments due to the Income Tax Department.
It is also compulsory to quote PAN in all documents pertaining to economic or financial
transactions notified from time-to-time by the Central Board of Direct Taxes.
Examples of such transactions are the sale and purchase of immovable property or motor
vehicles, or payments of hotel bills or payments in cash, of an amount exceeding ` 25,000/-, in
connection with travel to any foreign country.
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It is also mandatory to mention PAN for obtaining a telephone or cellular telephone connection.
Likewise, PAN has to be mentioned for making a time deposit exceeding ` 50,000/- with a bank
or post office or depositing cash of ` 50,000/- or more in a bank.
3. Is it compulsory to quote PAN on the return of income?
Yes, it is compulsory to quote PAN on return of income.
4. Who must have a PAN?
All existing assessees, taxpayers, or persons who are required to furnish a return of income,
even on behalf of others, must obtain PAN.
Any person, who intends to enter into economic or financial transactions where quoting PAN is
mandatory must also obtain PAN.
The Assessing Officer may allot PAN to any person either on his own or on a specific request
from such person.
5. Who does not require PAN?
Persons, with only agricultural income and those who do not have any taxable income, are not
required to obtain or quote PAN. Such persons will file a declaration (Form 61) in respect of
transactions where quoting the PAN is mandatory.
6. Where do I apply for PAN?
The Income Tax Department has authorized certain entities, such as UTI Investor Services Ltd.
(UTIITSL) and National Securities Depository Limited (NSDL), to dispense PAN services from
facilitation centers in all cities or towns where there is an Income Tax office. Further, a PAN
number may be applied for online.
7. Can a person obtain or use more than one PAN?
Obtaining or possessing more than one PAN is against the law.
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Aadhaar:
Aadhaar is a 12–digit unique number that the Unique Identification Authority of India (UIDAI) will
issue to all residents of India. The number will store basic demographics and biometric
information—a photograph, ten fingerprints, and an iris—of each individual in a central
database.
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Aadhaar will be easily verifiable, unique, and robust enough to eliminate the large number of
duplicate and fake identities in government and private databases. Aadhaar is a randomly
generated number devoid of any classification based on caste, creed, religion, or geography.
▪ It is a 12 digit number, not only a card
▪ It is for every individual, including infants. This means that each individual of a family will have
separate Aadhaar UID number
▪ It enables identification and is for every resident. It does not establish citizenship and is only
for Indians. ▪ Getting Aadhaar is voluntary, not mandatory.
▪ It is for every resident, irrespective of existing documentation. This means individuals without
identification documents can also get Aadhaar.
▪ Each individual will be given a single unique Aadhaar ID number. One cannot have multiple
Aadhaar numbers.
▪ Aadhaar UID number can be used by ration card, passport, or any ID based application. It will
not replace other IDs.
▪ UID Authority of India will give a 'yes' or 'no' response to any identification authentication
queries. Other information will not be accessible to public and private agencies.
