POINTS FOR CONSIDERATION

1. List of document as proof to be attached with application has been provided, since list has been recently amended.

2. Online application procedure for UTITSL has not been covered in detailed since respective website is not updated and persons largely utilise NSDL network.

Mandatory application of PAN when and by whom?

1. Before 31st May of the relevant Assessment Year where

• Total income of assessee or representative assessee exceeds maximum amount not chargeable to tax (for rates of tax to check maximum amount not chargeable to tax)

2. Before end of Accounting Year

   • Charitable/religious trust in case not allotted

3. Before end of Financial Year

   • Where total sales, turnover or gross receipts of business or profession exceed or likely to exceed 500,000 during any financial year

   • Any person who is entitled to receive any sum or income or amount, which is subject to deduction of tax at source in any financial year

4. Before exporting or importing

   • Exporter or importer who is required to obtain Import Export Code

5. Before making application for registration under respective tax laws

   • Central Excise applicant

   • Service Tax applicant

   • Central Sales Tax or respective State/Union territory sales tax applicant

6. Assessing Officer is to allot PAN suomotu having regard to the nature of prescribed transactions to allot a PAN. However now no such transactions are prescribed.

7. Assessing Officer to allot PAN on receipt of voluntary application from the person not falling under any of the above category

Persons exempted from obtaining PAN

1. Person who has agricultural income and is not in receipt of any other income chargeable to tax. However in case of specified transactions such person is required to furnish declaration in Form No. 61.

2. Non-resident

3.  Central Government, State Government and consular offices in transactions where they are payer.

PAN should be quoted on all

1. Income-tax/Wealth-tax Returns, TDS/TCS Statements/certificates,

2. Correspondence with income-tax department,

3. Tax challans,

4. Correspondence, bills, vouchers and other documents which are sent by deductee of tax to deductor,

5.  Documents pertaining to prescribed transactions

1. Sale & purchase of immovable property valued ` 500,000 or more,

2. Sale & purchase of motor vehicle other than two wheelers,

3. Time deposits with bank or banking institution exceeding ` 50,000,

4. Any deposits exceeding ` 50,000 with post office,

5. Entering into contract for purchase or sale of securities exceeding ` 100,000,

6. Opening account with bank or banking institution,

7. Application for installation of landline/mobile telephone connection,

8. Payment against hotel and restaurant bills exceeding ` 25,000 at any one point of time,

9. Payment in cash for purchase of bank draft, pay order to bank or banking institution aggregating of ` 50,000 or more, during any one day,

10. Deposit of cash with bank or banking institution exceeding aggregate of ` 50,000 or more during any one day,

11. Payment in cash (including fare, purchase of foreign currency from authorised person, payment to travel agent or a tour operator) in connection with travel to any foreign country of an exceeding ` 25,000 at any one time,
    However foreign travel does not includ travel to notified neighbouring countries viz. Bangladesh, Bhutan, Maldives, Nepal, Pakistan, and Sri Lanka, notified places of pilgrimages viz. Saudi Arabia, on Haj Pilgrimage organised by the Central HAJ Committee and China on pilgrimage to Kailash Mansarovar organised by the Ministry of External Affairs, GOI,

12. Application to bank or other company/institution for issue of credit/debit card,

13. Payment of ` 50,000 or more to a mutual fund for purchase of units,

14. Payment of ` 50,000 or more to a company for acquiring shares issued by it,

15. Payment of ` 50,000 or more to a company or institution for acquiring bonds, debentures issued by them

16. Payment of ` 50,000 or more to a RBI for acquiring bonds issued by it.

17. Payment of an life insurance premium amount aggregating ` 50,000 or more in a year to an insurer,

18. Payment to the dealer, of an amount of ` 500,000 or more at any one time, or against bill of an amount of ` 500,000 or more, against purchase of bullion or jewellery
    In case where specified transactions entered on behalf of minor viz. opening a bank account, placing time deposit exceeding ` 50,000 with bank/post office or purchase/sale of securities exceeding ` 100,000, PAN of father or mother or guardian can be quoted.
    In absence of PAN, person entering into above specified transactions is required to submit declaration in Form 60 or 61 as the case may be.

PAN Application

• Allotment of PAN is partly outsourced. Application is required to be made in respective forms before Assessing Officer through outsourced agency namely NSDL or UTIITSL.

• Form 49A – Applicable to Indian Citizens (including located outside India) /Indian Companies/Entities incorporated in India/Unincorporated entities formed in India;

• Form 49AA – Applicable to Individuals not being a Citizen of India / Entities incorporated outside India / Unincorporated entities formed outside India.

• Revised Forms have been introduced w.e.f. April 8, 2012

• Application can be made in physical format or electronically.

• In case of change in any particulars submitted at the time of original application, change or correction in PAN application in "PAN Change request form" is required to be filed. For the required changes to be incorporated/updated, relevant check boxes on the left margin of the form are required to be checked.

• "PAN Change request form" can also be used for re-print of PAN card. However, in such case no boxes should be checked.

Application requirements

• Physical Application

• Application should be filled with black ink pen only.

• Physical application can be submitted at any of the TIN facilitation centre / PAN centre managed by NSDL or UTIITSL.

• Online Application

1. Application can be submitted electronically using interface provided by NSDL or UTIITSL

2. Where application is submitted online, signed printed copy of the acknowledgment generated online is required to be submitted within 15 days from the date of online application.

3. Post online application (in case submitted with NSDL), acknowledgment can be submitted at Income Tax PAN Services Unit, NSDL e-Governance Infrastructure Limited, 5th Floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune – 411 016. Envelope is required to be super scribed as ‘APPLICATION FOR PAN — Acknowledgment Number’ (e.g. ‘APPLICATION FOR PAN — 881010100000097’).

• Each application should be accompanied with the documents in support of proof of identity and address. The requirement for the documents has been changed w.e.f. 1-11-2011 as under:

  1. Individual who is a citizen of India

  i. Proof of identity (POI)—
  Copy of,—

  1. school leaving certificate; or

  2. matriculation certificate; or

  3. degree of a recognised educational institution; or

  4. depository account statement ; or

  5.  credit card statement ; or

  6. bank account statement ; or

  7.  water bill; or

  8.  ration card; or

  9. property tax assessment order; or

  10. passport; or

  11. voter identity card ; or

  12. driving licence; or

  13. certificate of identity in prescribed format, signed by a Member of Parliament or Member of Legislative Assembly or Municipal Councillor or a Gazetted Officer, as the case may be.

  1. In case of an Indian citizen residing outside India, copy of passport is required as proof of identity.

  ii. Proof of address (POA)—
  Copy of,—

  1. electricity bill; or

  2. telephone bill; or

  3. depository account statement ; or

  4. credit card statement ; or

  5. bank account statement / passbook*; or

  6. ration card; or

  7. employer certificate; or

  8.  passport; or

  9. voter identity card; or

  10. property tax assessment order; or

  11.  driving licence; or

  12. rent receipt; or

  13. certificate of address in prescribed format, signed by a Member of Parliament or Member of Legislative Assembly or Municipal Councillor or a Gazetted Officer, as the case may be.

  1. In case application is made on behalf of a minor, any of the proof of identity/place may be in the name of any of the parents or guardian of such minor.

  2. In case of an Indian citizen residing outside India, copy of passport or copy of Bank Account Statement in country of residence or copy of Non-Resident External (NRE) bank account statements.

  2. Hindu undivided family—

     i. An affidavit by the karta of the Hindu Undivided Family stating the name, father’s name and address of all the coparceners on the date of application; and

     ii. Copy of any document as applicable to an individual, in respect of karta of the Hindu Undivided Family, as proof of identity and address.
      

  3.  Company registered in India – Copy of the Certificate of Registration issued by the Registrar of Companies.

  4. Firm (including Limited Liability Partnership formed or registered in India) –

     i. copy of Certificate of Registration issued by the Registrar of Firms/Limited Liability Partnerships; or

     ii. copy of Partnership Deed.
      

  5. Association of persons (Trusts) formed or registered in India –

     i. copy of trust deed; or

     ii. copy of Certificate of Registration Number issued by Charity Commissioner.
      

  6. Association of persons (other than Trusts) or body of individuals or local authority or artificial juridical person formed or registered in India –

     i. copy of Agreement; or

     ii. copy of Certificate of Registration Number issued by Charity Commissioner or Registrar of Co-operative Society or any other Competent Authority; or

     iii. any other document originating from any Central Government or State Government Department establishing Identity and address of such person.
      

  7. Individuals not being a citizen of India —

     i. Proof of identity: —

     1. Copy of Passport; or

     2. Copy of Person of Indian Origin (PIO) card issued by the Government of India; or

     3. Copy of Overseas Citizen of India (OCI) Card issued by Government of India; or

     4. Copy of other national or citizenship Identification Number or Taxpayer Identification Number duly attested by "Apostille" or by Indian embassy or High Commission or Consulate in the country where the applicant is located.

     ii. Proof of address :—

     • copy of Passport; or

     • copy of Person of Indian Origin (PIO) card issued by the Government of India; or

     • copy of Overseas Citizenship of India (OCI) Card issued by Government of India; or

     • copy of other national or citizenship Identification Number or Taxpayer Identification Number duly attested by "Apostille" or by Indian Embassy or High Commission or Consulate in the country where the applicant is located; or

     • copy of bank account statement in country of residence; or

     • copy of Non-resident External bank (NRE) account statement in India; or

     • copy of certificate of residence in India or Residential permit issued by the State Police Authority; or

     • copy of the registration certificate issued by the Foreigner’s Registration Office showing Indian address; or

     • copy of Visa granted and copy of appointment letter or contract from Indian Company and Certificate (in Original) of Indian Address issued by the employer.

• In respect of entities : LLP registered outside India, Company registered outside India, Association of persons (Trusts) formed outside India, Firm formed or registered outside India, Association of persons (other than Trusts) or body of individuals or local authority or artificial juridical person formed or any other entity (by whatever name called) registered outside India –

  i. copy of Certificate of Registration issued in the country where the applicant is located, duly attested by ‘Apostille’ or by Indian Embassy or High Commission or Consulate in the country where the applicant is located; or

  ii. copy of registration certificate issued in India or of approval granted to set up office in India by Indian Authorities.
   

• Other relevant points

  o Application should be complete in all respects, including details of Assessing Officer (AO). For non-resident AO code pertaining to International Taxation Directorate should be used and in case if not specified, AO details of International Taxation Directorate, New Delhi would be assigned.

  o Individual and HUF applicants can have Address for Communication as Office address. However in such case Proof of office address along with the Proof of residential address is to be submitted.

  o ‘Individual’ applicants should affix two recent colour photograph (size 3.5 cm x 2.5 cm)

  o Signature/Left Thumb Impression should only be within the box provided below the photo, on right hand side and on left hand side signature/ Left Thumb across the photograph.

  o In case application is signed using a left hand thumb impression, it should be attested by a Magistrate or a Notary Public or a Gazetted Officer, under official seal and stamp.

  o Proof of identity and address should exactly match with the name and address in application.

  o Non-resident applicants mentioning address of ‘Indian tax consultant’ as "care of" address must also provide original power of attorney notarised/attested by Indian Embassy/ High Commission or Consulate located in the country where applicant is located, which specifically mentions that ‘Indian tax consultant’ is authorised to accept notices from Income tax Department on behalf of the applicant. While filing form applicant’s own name should be filled in name column 14 – Name and address of Representative Assessee , Name of the "Indian tax consultant" should be filled in first line of address column of RA and address of the "Indian tax consultant" should be provided in remaining lines for address as "care of" address.

  o However note in form states that column 14 – Name and address of Representative Assessee, should be filled in by representative assessee only as specified in S. 160, such as agent of NR, guardian or manager of minor, lunatic or idiot, Court of Wards, Administrator General, Official Trustee, Receiver, manager, trustee of a Trust including Wakf.

  o In case the applicant being a foreign citizen who at the time of making the application is located in India provides office address, then it is mandatory to provide following documents as POA for the office address:—

  – Copy of Visa application to Indian authorities and

  – Copy of Visa granted and

  – Copy of appointment letter/contract from Indian Company and

  – Certificate (in original) of address in India of applicant issued by authorised signatory of employer on employer’s letter head mentioning the PAN of the employer.

  – Copy of PAN card for the PAN mentioned in the employer’s certificate.

  o However if such foreign citizen (applicant) does not have any office in India, but is registered/approved by any competent authority in India, it may provide an Indian address as office address which is mentioned in certificate of registration or approval of the competent authority or the accompanying documents issued by the competent authority to such applicant or in the application made by the applicant before the competent authority.

  o In case, AADHAAR is mentioned in the application (applicable for Individuals only), then the copy of AADHAAR allotment letter should also be enclosed along with the acknowledgment.

  o ‘Apostille’ documents may be submitted in case person belongs to the country which are signatories to The Hague Apostille Convention of 1961.

  o Application to be signed by the person who is authorised to sign return of income. Representative Assessee (RA) can also apply. In such a case documents pertaining to POI & POA of RA are also required to be submitted.

  o On submission of the application (both online & physical), acknowledgment containing a 15 digit acknowledge number is issued.

  o Application can be tracked online or through mobile using acknowledge number.

Processing Fees

• Application processing fees is ` 96 (` 85 +12.36% service tax) with Indian card delivery address and `962 [Application fee ` 96 (` 85 + 12.36% service tax) + Dispatch Charges 866] for card with foreign delivery address. Currently out country dispatch is available only for select list of 105 countries.

• Additional surcharge of ` 5/` 4 (plus service tax) is charged where payment is made by credit /debit card or through Net Banking facility respectively.

• Online application (Indian address only) payment can be made by

o demand draft or

o cheque or

o credit /debit card or

o net banking

• If communication address is a foreign address, the payment can be made only by way of Demand Draft.

• Demand draft/cheque shall be in favour of ‘NSDL-PAN’ and payable at Mumbai*.

• Payment by cheque shall deposit a local cheque (drawn on any bank) with any HDFC Bank branch across the country (except Dahej). The applicant shall mention NSDLPAN on the deposit slip*.

• Applicant’s name and the acknowledgment number should be mentioned on the reverse of the demand draft/cheque.

• Persons other than Central Government, State Government and Statutory, Autonomous Bodies are allowed to make payment by credit card/debit card/net banking. But such card or account of authorised persons only as under:

Association of Persons/Body of Individuals/Association of Persons (Trusts)/Artificial Juridical Person authorised signatory u/s 140 in respect of application

* Procedure may vary where application is made through UTIITSL.

RESPONSIBILITY OF OTHER PARTY

1. Every person who is in receipt of any document specified in rule 114B shall ensure after verification that PAN has been correctly quoted.

2. Every person who is in receipt of Form Nos. 60 & 61 (except such forms received at the time of opening bank account) shall forward it to Commissioner of Income-tax (Central Information Branch) in two instalments.

a. Forms received from 1st April to 30th September — latest by 31st October and

b. Forms received from 1st October and 31st March — latest by 30th April.
 

3. Every person deducting tax at source or collecting tax source shall quote PAN in all returns of tax deducted/collected and in certificate issued by him.

Implication of non-quoting of PAN

• Any person entitled to receive any sum or income or amount on which tax is deductible under Chapter XVIIB is required to furnish PAN to the deductor. If the payee fails to provide PAN to the deductor, tax would be deducted higher of (S. 206AA) :

o The rate mentioned in the relevant provisions of the Act;

o The rate in force;

o Twenty per cent
 

• Karnataka High Court in case of Smt. A. Kowsalya Bai v. UOI, [2012] 22 taxmann.com 157 (Kar.) has held that S. 206AA of the Act is made inapplicable to persons and read down from the statute for whose income is less than the taxable limit. The banking and financial institutions shall not invariably insist upon PAN from such small investors as well as from persons who intend to open an account in the bank or financial institution.

• Higher rate of TDS for non-providing of PAN, may also apply to non-resident payee.

• No certificate for Nil/lower deduction of tax shall be granted u/s 197 unless application bears PAN.

• Declaration provided under section 197A without PAN would be treated as invalid leading to deduction of tax at higher rate.

• In case PAN supplied is invalid or does not belong to the deductee, it shall be deemed as if PAN has not been submitted.

• Penalty u/s 272B of ` 10,000 may be levied in case of each default

  o Not applying or applying belatedly for allotment of PAN

  o Non quoting of PAN or

  o Fails to intimate PAN or

  o Supplies or intimate false PAN.

Tax Deduction and Collection Account Number (TDCAN)

TDCAN

• Common 10 digit Alphanumeric Number is allotted for both Tax deduction and/or collection.

• Application to be made within one month from the end of the month in which tax is deducted or collected. Tax deducted or collected cannot be deposited without TDCAN. Hence TDCAN need to be obtained before latest date by which tax deducted or collected is required to be deposited.

• Persons who have been earlier allotted TAN/TCS (ten digits) are not again required to apply for TDCAN.

• Every deductor / collector can have only one TDCAN, but different branches/divisions of a deductor / collector may apply for separate TDCAN for each branch/division.

• Applicable Section, Rules and Form: Section 203A, Rule 114A and Form No. 49B. Rule 114AA has been redundant w.e.f. 8-12-2004 upon introduction of substituted rule 114A for TDCAN.

TDCAN Allotment process

• Allotment of TDCAN is partly outsourced.

• On receipt of application, NSDL would forward it to Income Tax Department (ITD) in digitised form.

• ITD would then allot TDCAN and intimate to NSDL electronically.

• Post receipt of information, NSDL issues the TDCAN letter to the applicant.

• Deductors can search TDCAN on www.incometaxindia.gov.in

Application

• Application for the allotment of TDCAN, to be made in Form No. 49B.

• Application can be either submitted online or through NSDL to the designated Assessing Officer (TDS/TCS) having jurisdiction to assess the applicant.

• Online application can be made at www.tin-nsdl.com

• In case change in any of the particulars submitted at the time of furnishing original application, amendment application is required to be made in "Application for Changes or Correction in TAN Data for TAN allotted". However in case the applicant's address changes to a different city and the new address falls under different Regional Computer Centre of ITD, applicant needs to apply for a new TDCAN and can apply for cancellation of old TDCAN.

Requirements

• Physical application
  o Application should be filled in black ink.
  o Physical copy of application can be submitted at any of the TIN facilitation centre.

• Other

  o Application should be complete in all respects, including details of AO (TDS/TCS).

  o Address of the applicant has to be Indian address only.

  o Signature/Left thumb impression should only be within the box provided in the acknowledgment. In case of applicants other than 'Individuals', the authorised signatory shall sign the acknowledgment and affix the appropriate seal or stamp. In case application is signed using a left hand thumb impression, it should be attested by a Magistrate or a Notary Public or a Gazetted Officer, under official seal and stamp.

  o No documents are required to be attached along with TDCAN. However in case of "Application for Changes or Correction in TAN Data for TAN allotted" outsource agency insists for copy of existing TDCAN (copy of TDCAN allotment letter or in absence of TDCAN letter, applicant can submit a printout of TDCAN details using TAN search facility provided at www.tin-nsdl.com or www.incometaxindia.gov.in), documentary evidence in respect to changes or corrections.

  o On submission of the application, acknowledgment containing a 14 digit unique number is issued.

  o Application can be tracked online or through mobile using unique number. (SMS NSDLTAN < space > acknowledgment no. & send to 57575)

Processing Fees

• 62 (including service tax) is charged towards processing of all types of application.

• Additional surcharge of 5/ 4 (plus service tax) is charged where payment is made by credit /debit card or through Net Banking facility respectively.

• Online application payment can be made by:

o demand draft or
o cheque or
o credit /debit card or
o net banking
 

• Demand draft/cheque shall be in favour of ‘NSDL-TIN’ and payable at Mumbai.

• Payment by cheque shall deposit a local cheque (drawn on any bank) with any HDFC Bank branch across the country (except Dahej). The applicant shall mention TANNSDL on the deposit slip.

• Applicant’s name and the acknowledgment number should be mentioned on the reverse of the demand draft/cheque.

• Persons other than Central Government, State Government and Statutory, Autonomous Bodies are allowed to make payment by credit card/debit card/net banking. But such card or account of authorised persons only as under:

Cancellation of TDCAN

Cancellation of TDCAN can happen under two situations:

• Duplicate TDCAN

• TDCAN no more required

Process of cancellation

• For cancellation of duplicate & unused TDCAN, application to be made to ITD through NSDL in "Application for Changes or Correction in TAN Data for TAN allotted".

• For cancellation of "TDCAN if no more required" application to be made on plain paper before jurisdictional Assessing Officer (TDS), along with the reasons for such request. However AO to proceed only after verifying genuineness of the application and authenticity of the person making application.

Responsibility of person deducting/collecting tax

TDCAN to be quoted in all

• Challans,

• TDS/TCS certificates,

• Return or statements of TDS/TCS,

• All such other documents pertaining to such transactions as may be prescribed

Penalty

Penalty u/s 272BB of 10,000 may be levied in case of each default of:

• Not applying or applying belatedly for allotment TDCAN,

• Non quoting of TDCAN, or

• Quoting TDCAN which person believes to be incorrect.