PAN Registration is mandatory for the purpose of filing of Income Tax Returns , GST Registration etc. Permanent Account Number is commonly known as "PAN" is a 10 digit alphanumeric code assigned to all taxpayers. PAN Card is issued to individuals, companies, non-resident Indians or anyone who pays taxes in India. PAN card contains information such as an identity, age proof and also complies with the Know Your Customer (KYC) guidelines.
Each character represents distinct information about the holder. The first three letters are purely alphabetical in nature and contain three-letter of the alphabet from A to Z. The fourth letter represents the category of the taxpayer in the following manner:
A – Association of Persons
B – Body of Individuals
C – Company
F – Firms
G – Government
H – Hindu Undivided Family
L – Local Authority
J – Artificial Judicial Person
P – Individual
T – Association of Persons for a Trust
PAN cards are, therefore, an essential document for taxpayers. It is mandatory to have a PAN in order to receive a tax refund and filing ITRs.
For a business not having PAN Registration, Tax Deducted at Source will be at a flat rate of 30%.
Further, a new initiative called e-PAN card has been introduced by the Income Tax Department. Users can use the e-PAN card facility to instantly obtain a PAN card by applying online. To obtain an e-PAN card, it is mandatory for the applicant to possess an Aadhaar Card.
Moreover, the e-PAN card can be applied for only by Indian residents aged 18 years and above. Individuals already possessing a PAN cannot apply for an e-PAN. Also, e-PAN cannot be obtained by the company or LLP or partnership firm.
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