Tillie Doyle
In India, a Permanent Account Number (PAN) card is a crucial form of identification for citizens and is required for most financial activities, including property registration, GST registration, and the formation of an enterprise. While it is not mandatory for all transactions, PAN cards are essential for significant financial matters like buying, selling, or registering immovable properties valued above a certain threshold, which varies according to different sources but typically ranges from Rs. 5 lakhs to Rs. 10 lakhs. For non-resident Indians (NRIs), the requirement for a PAN card may differ, and they are generally exempt from this requirement unless they intend to make financial investments in Indian businesses. However, even in cases where a PAN card is not mandatory, its absence can complicate and slow down certain processes, such as opening a bank account or applying for loans.
Characteristics of registering without a PAN card
| Characteristics | Values |
|---|---|
| Is PAN mandatory for GST registration? | Yes, except for non-resident persons who can get GST registration on the basis of other documents. |
| Is PAN mandatory for property registration? | Yes, if the value of the immovable property is more than Rs. 5 lakhs or Rs. 10 lakhs. |
| Is PAN mandatory for non-resident Indians (NRIs) for property registration? | No, NRIs are exempt from the requirement to have a PAN card, especially if they have no intention of making financial investments in Indian businesses. |
| Is PAN mandatory for sole proprietorship registration? | While it is possible to register without a PAN card, it is not recommended as it may cause delays and complexities in the registration process and future financial activities. |
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What You'll Learn
Property registration
In India, a PAN (Permanent Account Number) Card is one of the most important documents required for property registration. It is a 10-digit alphanumeric code that records all tax-related information for individuals and entities. The PAN card acts as a primary key for financial transactions, making it a mandatory document for banking, tax filing, and business registration.
When purchasing or selling immovable property, both the buyer and the seller are obligated to furnish their PAN Card Numbers to the registrar overseeing the transaction. This is mandatory if the value of the property exceeds Rs. 5-10 lakhs, depending on the source. The PAN Card Number is also required for claiming TDS (Tax Deducted at Source) on rental income. If the landlord fails to furnish their PAN Card, the TDS claimed by the tenant rises from 5% to 20%.
If an individual does not have a PAN Card, they can fill out and submit Form No 60 to proceed with property registration. However, it is important to note that the registrar conducting the property registration may refuse to register the documents without a PAN Card.
In addition to the PAN Card, other documents required for property registration include proof of ownership (such as a copy of the old sale deed) and a title deed. These documents act as legal proof of ownership and provide a historical record of the property's ownership.
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GST registration
The process of obtaining GSTIN (GST Identification Number) is known as GST registration. Each taxpayer is allotted a PAN-based 15-digit GSTIN in every state that they operate. It is obtained as a part of the GST registration process.
The complete GST registration procedure, including receiving the GST number, usually takes 7 to 10 working days. However, GST registration services are available to guide applicants through the process and ensure compliance with the requirements.
It is important to note that GST registration is state-specific. An individual who is registered in one state is considered an 'unregistered person' in another state. Therefore, suppliers must register in every state or union territory from which they supply services.
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Bank account creation
It is possible for an individual to open a bank account without a PAN card, as long as they have valid Know Your Customer (KYC) documents. These documents help the bank verify the identity and address of the individual.
When applying to open a new bank account, individuals are typically required to provide proof of identity and proof of address. While a PAN card can serve as both, it is not the only document accepted by banks.
- Passport
- Aadhaar card
- Voter ID card
- Driving license
For proof of address, the following documents can be submitted:
- Passport
- Aadhaar card
- Utility bills (such as electricity, telephone, or water bills)
- Bank statement from another bank
- Rent agreement
It is important to note that the specific requirements may vary slightly between different banks and branches. It is always advisable to check with the chosen bank beforehand to ensure you have the correct documentation.
During the account opening process, the bank will typically ask for some personal information, including the individual's name, date of birth, occupation, and contact details. They will also ask for details of any existing bank accounts and may require information about the source of funds that will be deposited.
Once all the necessary documents have been submitted and verified, the bank will usually provide a timeframe within which the account will be opened. This process can vary in duration, depending on the bank and the specific circumstances of the applicant.
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Income tax filing
In India, a PAN (Permanent Account Number) card is a crucial document required for several activities, including income tax filing and property registration.
For income tax filing, the Instant e-PAN service is available to all individual taxpayers who do not have a PAN but possess an Aadhaar card. Here is a step-by-step guide to obtaining an e-PAN and filing your income tax return:
Obtaining an Instant e-PAN
- Go to the e-Filing portal homepage and click on "Instant e-PAN".
- On the e-PAN page, click on "Get New e-PAN" or "Update PAN".
- Enter your 12-digit Aadhaar number and click "Continue".
- On the OTP Validation page, enter the 6-digit OTP received on your mobile number registered with Aadhaar and click "Continue".
- After OTP validation, review the Aadhaar e-KYC details along with the PAN details. Select the details to be updated as per your Aadhaar e-KYC by clicking on the respective checkboxes, and then click "Continue".
- After selecting all the details to be updated, click "Confirm". A success message will be displayed with an Acknowledgement Number.
- You will also receive a confirmation message on your mobile number and email ID linked with Aadhaar.
Filing Your Income Tax Return
- Visit the official website of the Income Tax Department.
- Register yourself on the e-Filing portal by clicking on "Register".
- After successful registration, log in to the portal using your credentials.
- On your Dashboard, click on "Services" and then "View / Download e-PAN".
- On the Enter Aadhaar Number page, enter your 12-digit Aadhaar number and click "Continue".
- Follow the subsequent steps to complete your income tax filing, such as verifying your PAN, selecting the relevant assessment year, and filling out the tax return form.
It is important to note that the due date for filing ITRs for AY2025-26 has been extended to September 15, 2025. Additionally, non-resident Indians (NRIs) holding Indian passports are exempt from the requirement to have a PAN card if they do not intend to make financial investments in Indian businesses.
While a PAN card is generally required for property registration, there may be certain exceptions, as mentioned in the responses above.
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Sole proprietorship registration
Sole proprietorship is a common business structure in India. It is suitable for individuals who want to start a business with less investment. It can be started from home or on a premise with a minimum amount. The control of the business is solely in the hands of the single proprietor/owner who invests in the business. The proprietor can appoint persons for conducting the business, but the ownership will rest solely with him/her.
A sole proprietorship business can be easily set up and operated, making it a popular choice for small businesses and startups in India. It does not require any registration as such, but certain basic registrations are required to be obtained by a sole proprietorship firm for doing business. The basic registrations required by a sole proprietorship are:
- Registration Certificate under the Shops and Establishment Act of the state in which the business is located.
- GST registration.
- MSME registration.
- If the sales or turnover of the business crosses the threshold limit of Rs.40 lakh in a year, then it is compulsory to get GST registration. However, businesses registered in special category states must obtain GST registration if their threshold limit crosses Rs.20 lakh.
A PAN card is a vital identification document issued by the Indian Income Tax Department. It is a unique 10-digit alphanumeric code, unique to each PAN cardholder, facilitating the government in monitoring and regulating financial transactions while ensuring transparency and accountability in the taxation system. Individuals and businesses need to get a PAN card for diverse economic activities, including establishing a bank account, filing income tax reports, and forming an enterprise.
A sole proprietorship firm will use the proprietor's PAN card for all legal and official purposes. The proprietor's PAN card will be used as the ultimate owner and operator of the proprietorship bank account. The proprietor will need to submit their PAN card for the smooth filing of a sole proprietorship.
While it is possible to register a sole proprietorship without a PAN card, it is not recommended. Registration can be more complex and time-consuming without a PAN card. In some instances, alternative documents such as a Voter ID card, Aadhaar card, or Driving License may be common evidence of identification. However, these options may not be accepted by all authorities or financial institutions. Not having a PAN card could cause issues with tax officials or filing income tax forms, creating a bank account, seeking loans, or joining government bids.
To obtain a PAN card, individuals must fill out Form 49A, the application form for PAN, either online or from the local UTIITSL or NSDL office. The form requires various details, including business name, address, contact information, and other relevant details. The form must be duly filled, signed, and submitted. After filling out the form, individuals must attach the necessary supporting documents, such as identity proof, address proof, and proof of the existence of the business (like a registration certificate). The fee for the PAN card application can be paid online or through a demand draft. The completed application, along with the required supporting documentation and payment, can be submitted by mail or delivered to the closest NSDL or UTIITSL office. After submission, an acknowledgment receipt with a unique 15-digit acknowledgment number will be provided for tracking the application status.
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Frequently asked questions
Yes, a PAN card is mandatory for property registration in India. Both the buyer and the seller must present their PAN cards if the value of the immovable property is more than 5 lakhs or 10 lakhs.
Yes, a PAN card is required for GST registration. However, non-resident persons can obtain GST registration based on other documents.
Yes, alternative forms of identification such as a Voter ID card, Aadhaar card, or Driving License may be used for property registration. However, these options may not be accepted by all authorities or financial institutions.
Not having a PAN card can result in a more complex and time-consuming registration process, as well as difficulties in opening a bank account, obtaining loans, or participating in government bids.
No, a PAN card is not required for all financial transactions in India. However, it is mandatory for certain significant financial transactions, such as buying or selling property, establishing a bank account, or filing income tax reports.
