General Queries Regarding PAN Card

Permanent Account Number or PAN is unique 10 digit alpha numeric identity allotted to each tax payer by the Income tax department. It is identity proof for all government and non government dealings.

However there are many queries among the public about PAN and its usage. Here is the list of general queries regarding PAN card:

1. Is it mandatory for NRIs to have PAN card?

A: Yes, it is mandatory as per Income tax Department and SEBI also has made PAN compulsory for all investors wanting to invest in India. In case any person wants to carry out any kind of financial or investment related transaction over INR 49,999 in India, PAN is mandatory.

2. Is it required for NRI to file income tax return in India if they have PAN?

A: No, it is not compulsory and in case you generate income from India, you need to file tax return. Also it is advisable to file tax return even though you are not making any money in India as it enhances your creditability and makes it easy for a person to avail various types of loans.

3. Who can apply?

A: All existing tax payers or persons who are required to file a Return of Income even on behalf of others and any person who intends to enter in economic or financial transactions were quoting PAN is compulsory.

4. How do I apply?

A: One can apply for PAN by filling up the application forms 49 A or 49AA (for other than Indian citizen). Also one can apply through TIN facility centre, Alankit group is one of them.

5. Is there any need for me to apply for PAN in case I relocate from one city to another?

A: As in the name, the number is permanent and does not change with change in address. In case there is change in address, it should be intimidated to Income tax department so that the new address can be updated in PAN database. Same can be done by filling up form request for new PAN card or for changes and correction of PAN data and submitting the form at any TIN facility centre.

6. Can I obtain or use more than one PAN?

A: Obtaining more than one PAN is punishable under law and may attract a penalty of INR 10,000. In case you have more than one PAN, then it is better to surrender immediately the unused PAN by logging into www.incometaxindia.gov.in.

7. Is a photograph compulsory for making an application for PAN?

A: For “individual” applicants 2 recent color photographs of size 3.5 x 2.5 cm. Paste the photos and avoid stapling or clipping to the form.

8. Is father’s name compulsory for female applicants (including married/ divorced/ widow)

A: Female applicants, irrespective of their marital status should write only father’s name in the PAN application form.

9. What are benefits of using PAN card?

A: PAN card is compulsory document and is required to be produced for many

Government and non government matters. It acts as tax ID which is must for NRIs in case they wish to invest in shares, open a Demat account, purchase real estate etc.

10. What is procedure for applicants who cannot sign?

A: In such cases, left thumb impression (preferred with black ink) of the applicant should be made on format place meant for signature. It should be attested by magistrate or Notary public or Gazetted officer under official seal and stamp.

11. Is it mandatory to mention telephone number/ email ID on PAN application form?

A: It is not compulsory to mention telephone number/email ID but provided will enable to contact the applicant in case of any discrepancy in application.

12. Can application be made on plain paper?

A: No, application should be made only in prescribed format notified by CBDT.

13. Is it compulsory to quote PAN on return of income?

A: Yes, it is compulsory to quote PAN on return of income.

14. If you want to pay taxes today and do not have PAN?

A: It takes 15 days to get new PAN; however PAN can be obtained in 5 days if application is made through internet and processing fee is paid through credit card.

Simple investment benefits with opening your demat account

Dematerialized account (Demat) account is the account opened by the investor while registering with an investment broker or the sub broker. In simple words just as you deposit your money in your bank same why demat is to your shares. It is an account that holds all your shares in electronic or dematerialized form.

Just as bank account holds certificates of your financial instruments like shares, bonds, mutual funds, government securities and exchange traded funds and one cannot trade in stock market without the demat account.

How this account works:

1. Central depository: There are two depositories in India – CDSL and NSDL and both of them hold all the demat accounts. CDSL holds details of your share holding on your behalf as your bank.
2. Unique Number: Every demat account has unique number for identification purpose and this is the number that is needed to provide for transactions. The number aids the exchange and also the companies to recognize the investor and credit the shares in the investor’s account.
3. Depository participants: Access to central depository is provided by Depository participants or DPs. They act as intermediary between central depository and the investor. They could be banks, financial institutions or brokers as these are empowered to offer demat services.
4. Portfolio holding: This account holds all the securities. As and when the investor checks the account, complete details of the portfolio holdings and its details. These are updated automatically every time you conduct a transaction of buying and selling.

   Benefits of opening a demat account:

• Common Bank: Demat is not just for shares, but also for debt instruments like bonds and this helps you to hold all your investments in single account.
• Automatic update: Since it is common account one does not have to keep giving details like address every time you do transaction or every time you change the details. All these details are automatically available to companies with whom you conduct transaction.
• Odd- lot problem: Earlier shares were transacted in lots and a single or odd number of securities could not be transacted and now this issue is done away with.
• Delivery risks: Demat has also eliminated the risks of fake shares, thefts, deliveries that were wrong etc. As it is automated it has done away with lot of paper work. Also the time of delivery is minimized. Once your transaction is approved, the securities are automatically credited to your account.
• Cost reduction: Demat has drastically reduced the extra costs. Earlier when one transferred the securities, one has to incur the extra costs due to stamp duty and this is not a problem with demat form.
• Easy to hold: Paper certificates are prone to damage and tearing. Whereas in case of demat format no such problem is emerged. It is the most safe and convenient way to hold securities. You can have a nomination facility where as the investor can facilitate the transfer of shares in the event of death.
• There are no restrictions on transactions as with demat account one can sell or buy even a single share, which is not possible if the securities are in physical form as physical shares are stacked together collectively whereas demat shares are easily divisible electronically.
• Corporate benefits: The dividends, refunds or interests incase offered by the companies are automatically available to the Demat account holders. In addition corporate actions like bonus issues, right shares or stock spilt are automatically updated in Demat account of all the shareholders.
• Multiple accessing: This account is electronically operated and so it can be assessed using multiple modes. This account can be accessed through internet using a computer, mobile phones or any other smart device.
• Freezing: Here the demat holders can freeze their accounts for a certain period in case required. This option enables to prevent unexpected debit or credit in one’s demat account. This option is available for specific numbers of securities held in account.

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