How to get a PAN ? Steps

Have you been wanting to apply for a permanent account number
(PAN), but postponed it thinking it would be time-consuming? Fear not, for the process is neither time-consuming nor complicated.

Also, do not fall for the thousands of ads that you find in public places offering services to get a PAN card “for Rs 200 only”. You can do it in less than half the amount — all it takes is a cheque or a demand draft for Rs 94, and a credit or a debit card transaction to get a PAN.

So, getting a fresh PAN card or a new one and even changing details such as address, name, etc, provided earlier all can be done using different forms at the same cost. This fee is inclusive of service tax and cess.

Getting the form

You can download the form from any of the following websites — www.utiisl.co.in, www.incometaxindia.gov.in or tin.nsdl.com. In case you are not able to access the Internet, then there are various IT PAN Service Centres where you can get the form. Even the Tax Information Network of NSDL offers physicals forms. Many brokerage houses also offer PAN forms.

In case you wish to apply online, then you need to go to www.tin-nsdl.com and select the relevant form to apply — request for change in information, new PAN, etc.

What else will I need?

You will need a photograph — 3.5 x2.5 cm, which is to be attached, any one identity proof, one address proof and the cheque or demand draft for paying the fee. The cheque or DD has to be in favour of “NSDL-PAN”.

What documents are valid?

For submitting the identity proof, you can attach any one of the following documents:
School leaving certificate
Ration card
Property tax assessment order
Driving licence
Voter’s ID card
Bank, credit card, depository (demat account) statement

The documents permitted as address proof are:
Electricity/ telephone bill
Passport
Employer’s certificate
Rent receipt

An attested copy of these documents must be provided with the application.

How long will it take?

Getting a PAN takes anywhere between 15-45 days, depending on the details provided and the supporting documents. In case you have less time on hand, then using the online procedure is faster. You have to fill Form 49 (A) and submit it online. The payment can be made using a credit or debit card. However, an additional Rs 5 must be paid as bank surcharge on the payment.
In case of an online application, the authorities will communicate in case of any discrepancies via email.

Signature & acknowledgment

If you are applying online, you will have to print the filled online form, attach a picture and sign in the box provided at the bottom. Don’t sign on the photograph as the application can be rejected if there is any mark on the photo.

On submission of the form online, you will be given a 15-digit acknowledgment number. Save this number, as all tracking regarding the status of your PAN card, etc, can be done using this number.

Cheque/ DD payments

If you are paying via cheque or DD, the cheque is to be dropped at HDFC Bank branches in your city. You can also personally submit it at NSDL’s Mumbai office — Trade World, A Wing, Kamala Mills Compound, Lower Parel. Telephone: 022-24994200

Applying online - the follow-up

Once you have submitted the form online, the printout in your hand along with the other essential documents and photo can be sent via courier to the NSDL centre in Pune. On the envelope don’t forget to mention the 15-digit acknowledgement number.
Address the envelope to: Income Tax PAN Services Unit, National Securities Depository Limited, 3rd floor, Sapphire Chambers, Near Baner Telephone Exchange, Baner, Pune - 411045

Physical applications

For those filing the form by the traditional route, the place from where you got the form can accept the application with documents. The NSDL office in Lower Parel too accepts the form and the cheque/ DD.

Application status

The NSDL website allows you to check the status of your PAN application. You need to provide the name and date of application as well as the acknowledgement number. Alternatively, one can check with the Tax Information Network by calling 020-27218080.
An email can be sent to tininfo@nsdl.co.in. You can also send an SMS — type NSDLPAN the 15-digit acknowledgement number and send it to 57575.

via DNA

PAN Card Compulsory for all transactions

The start of this new financial year requires additional effort from tax payers, as they need to be vigilant about their tax deduction at source (TDS). For some years now, there have been efforts made to ensure a particular procedure is followed for TDS and this includes disclosing the permanent account number (PAN).

Starting April 1, the punishment has been changed to a higher tax deduction for those who do not disclose PAN.

Tax at varied rates is deducted for various incomes and then the net payment is made to the beneficiary. The nature of income or earning, the person or entity receiving the income, determine the rate at which the tax is deducted. For instance, when a bank pays interest in excess of Rs 10,000 to an individual at a single branch, the tax is deducted at source from the interest earned. The individual will take a tax cut at the rate of 10 per cent plus an education cess.

As per the new guidelines applicable from financial year 2011, if a deposit holder does not provide the PAN, there is an obligation on the bank to deduct 20 per cent from the interest he earned, that is, double the rate applicable under normal circumstance. Here are some cases where the tax burden can suddenly jump higher for an individual. For better, easier understanding, the education cess is not taken into account.

INSTANCES

Many times, an individual has the PAN but does not disclose it. Like in case of aprofessional who has worked for, say, Rs 35,000. This could be a one-off service to a new client and in such a case, the PAN might not have been provided at the time of payment.

In this case, the entity making the payment would ensure that instead of 10 per cent, the tax is deducted at 20 per cent for not getting the person's PAN. As a result, the individual's net pay for his service is reduced to Rs 28,000.

Such a situation is likely with a large oneoff transaction or even when the person does not normally come under the taxable limit. But, due to some extra payment, the tax is deducted at a higher rate.

THE VULNERABLE

Senior citizens are likely to get trapped in the higher TDS situation because they often have deposits with a bank or have invested in Government of India bonds, where the interest earned is more than Rs 10,000. Since the elderly have a basic exemption limit of Rs 2.4 lakh, their earnings may not come under the taxable limit. In that case, they can submit Form15H with the bank and avoid the TDS. However, if they fill the form but fail to mention the PAN, then they could be slapped with a tax deducted of 20 per cent instead of zero tax.

Usually, families have some deposits or bonds in the name of some members, even if they are unemployed like housewives. They have some deposits or government bonds in their name. Since, they are not working and do not fall under any tax bracket, they can submit Form 15G to the bank and avoid TDS. But, if they fail to provide the PAN in the form, they will be liable for a 20 per cent tax deduction at source.

PROCEDURES

There are often procedures adopted for various business dealings. One of it being quoting a PAN.

Often, when the mistake is realised, efforts are made to stop usage of the old number and replacing it with the correct one. In such a situation, could lead to authorities considering there was no PAN provided. Hence, the beneficiary could face a higher tax deduction.

For example, if there is a rent of Rs 20,000 paid per month to an individual, then the TDS on the amount would be 10 per cent. However, due to a wrong PAN disclosure, there could be some delay in conveying the correct number and in the interim, the tax could be deducted at the higher end.

DEDUCTORS MISTAKE

The worst situation is when an individual has provided his PAN to the concerned authorities. But, the there is a mistake committed by the authority. This could lead to either considering the number is misplaced or it is not given. Therefore, the deduction made is at a higher rate.

Example: The rate of tax deduction when acontractor is an individual is one per cent. If the authorities commit mistake with the person's PAN, he will be slapped ahigher tax outgo of 20 per cent. The difference will be huge, having a serious impact on the beneficiary.

WHAT TO DO

In sum, actual work begins even before the payment is made, because the PAN has to be conveyed to the payer. One condition in the new guidelines says the PAN has to be quoted in all correspondence, bills and vouchers exchanged between the deductor and the deductee, which will ensure the number is available with the concerned authorities.

Suppose a higher tax is deducted at source. The total tax to be paid would not increase, instead the individual will have to look for adjusting the deducted tax amount. For some people, this will take place only at the time of filing tax return, especially for a salaried people who might not have any additional tax burden to adjust the deducted amount. In such asituation, the tax return will show that arefund is due but this will take place only at the end of the financial year.

There can be quicker action if the individual has to pay some advance tax and this would be the case for professionals, salaried individuals with additional or other income. In this case, the adjustment will come earlier because they will pay the reduced amount of advance tax on the income after adjusting for the higher TDS made and hence need not wait till the year-end.

via Google Group

An ID to confuse the MF investor

There is a sour acronym soup brewing in the financial markets. After Sebi’s investor identification number — MAFIN, Amfi has put its broth to boil with MIN, a number that investors will have to quote while making mutual fund investments of more than Rs 50,000.

At this rate, the next may be the insurance industry coming up with another identification scheme ending with ‘-IN’. Forget the prevention of proliferation of nuclear weapons, somebody should check the proliferation of identification numbers.

All the financial audit trail can be accomplished by using the permanent account number (PAN). Then, what is the point of having multiple identification numbers that could turn out to be a nightmare in terms of data extraction or issues related to data security?

“In mature systems, it is advisable to have a single identification number or code for an individual to help maintain integrity and availability of data to reduce overheads. For improved information security, it is important to have one piece of information compared to discrete pieces,” says Raghu Raman, CEO, Mahindra Special Services Group.

Ideally, mutual funds do not even need to have the PAN as they never take investments in cash. Mutual fund investments can be made by cheques. The fact that an investor has a cheque means that the investor has a bank account. This means that due diligence has been taken while making an individual a customer of the bank.

In case a bank customer is a front for someone and is investing it into a mutual fund, the extra-ordinary cash transaction can always be spotted by the bank and reported to the tax guys. The bank also makes sure that the identity of the customer is genuine. It takes into consideration his PAN and other identification details that include an address proof in the form a passport or an electricity or telephone bill. In many cases a passport is insisted as it is not so easy to forge a passport. Individuals do not mind citing the PAN on any required document as it is considered like a social security number.

The mutual fund industry was against the introduction of the MIN as it will only make the investors process of investing more complicated. The asset management companies will now be paying for the allocation of MIN, and thus fund houses are not happy about taking this unnecessary additional expense on their balance sheet. Mutual funds always insist on the PAN when investors invest more than Rs 50,000 in one particular scheme and they feel that there was no need to have a separate number as the PAN number is supposed to be universal.

In the interest of customer privacy and data security, it is better to have one identification number than many. It is even better when that number is in custody with a trusted authority like the income tax department.