With a total population of more than a 120- crore people in India, the government authorities have a really hard time figuring the total number of transactions entered into each day. This is important for the government to ensure the adequate payment of income taxes by those eligible to pay the same. This, in turn, helps to run the economy of the country in an adequate manner. This is where having a Permanent Account Number helps you. Not only is the government aware of the rightful payment of taxes, but it acts as a must document that you should have as an identity proof.
By now, most of us know quite a lot of things about the Permanent Account Number or the PAN card. There are, however, a few of us that might not be aware of the following interesting facts about the PAN card. Find out about the same in the section that follows:
10. The Permanent Account Number comprises of 10 alphanumeric characters and is held by the taxpayers of the country. It is issued under the guidance and supervision of the Central Board of Direct Taxes and takes the form of a card that has been laminated. It was issued to track the tax payments by the parties which are eligible for the same in India. It helps to keep an account on the financial transactions by the Indian citizens so that people and organizations do not evade taxes. The PAN number remains the same irrespective of the address of the individual or the company.
9. Not many people know that the PAN card was first introduced in the year 1972 as a means of bringing about the required changes in the financial division of the country. This was, however, a manual process and the Indian government, in 1985, introduced a digital process for the same. However, this process too failed because of a lack of proper resources required to introduce the changes PAN system. Further modifications were done in order to arrive at the PAN card that we today are aware of.
8. You can apply for a new PAN card online in the dedicated government website. Besides, any changes in the name or other data that you would want to make in the existing details can also be modified in the website dedicated to the PAN cards for the Indian citizens. Apart from that, if you are not comfortable making an online application, you can also apply for a new PAN card offline. For this purpose, you need to fill form 49A and the form is quite self-explanatory.
7. The PAN card, as we see today, comprise of important data of the taxpayer. Some of the information contained therein includes the date of birth, photo, as well as the signature of the concerned individual.
6. Only one-fourth of the total Indian population have PAN cards registered in their names. Given the huge Indian population, that turns out to be 25 crore people and firms, entities, etc. that have the Permanent Account Number. That is quite a low figure. Besides, the government data states that a mere 3 percent of the Indian population is known to pay the income taxes. India really stands behind as far as this figure is concerned. The highest tax paying states in the country include Delhi while Uttar Pradesh pays the least amount of income taxes which is quite a dire situation.
5. The importance of the PAN card in India can be assumed from the fact that most of the government data related to the financial transactions of the economy are acquired from the PAN card that you hold. Accordingly, most of the financial decisions related to budgeting, the flow of currency, and the estimation of revenue are also taken accordingly by the government from the available PAN card details.
4. According to the data that the Indian government has, only a mere eleven lakh people out of the total 121 crores Indian population earn a yearly income of more than 10 lakh rupees, which is roughly around 0.091 percent of the total population. The remaining Indian population earn much below this amount and surprisingly, India still qualifies as a developing country in the world forum.
3. Most of the people blindly believe in the fact that no person can hold two PAN cards. However, the statement is a myth and the truth is much deeper. A part of it is true though and people assume it to be different than what it is actually supposed to be. Although it is illegal for the same person to hold two different PAN cards with two different PAN numbers, the same person can hold more than one PAN card provided each is identical.
2. If you are making any type of transaction that happens to be of a value greater than 2 lakh Indian rupees, you need to show your PAN card details so that the transaction can be authorized. Items that cover these types of transactions also include jewelry and other luxury items. This move has only been announced in the recent times by the Indian government. Initially, the limit was not the same for the presentation of PAN card details as far as the financial transactions are concerned.
1. The most interesting fact about the PAN card is its very structure. The PAN card, as we know, comprises of letters and numbers. Herein, the first five characters in the 10-digit PAN number are alphabets, the next four are numbers, and the last one again is a digit.
The logic with which the letters and the numbers are decided is as follows:
- The first three letters in the PAN number are anything between A to Z decided on a random basis.
- The fourth letter is based on the type of taxpayer that you are. For example:
P stands for a person or an individual
F for a firm
C for a company
A for Association of Persons
H for HUF
L for local
T for Trust
G stands for a body of individuals or Government and J stands for Artificial Judicial persons
- The fifth letter of the PAN number is the first digit of your surname if you are an individual. However, if you are an HUF or an entity, it is the first digit of your name
- The subsequent characters of the PAN number are nothing but the numbers between 0001 and 9999.
- Finally, the last character in the PAN is a digit that is obtained by applying a particular formula to all the nine digits as stated above
Thus, the Permanent Account Number which happens to be the most important of all the documents that you should carry when you are doing some kind of transactions, have much more to it than we already knew!!