I am an Individual

PAN

Why do I Need

Good Morning. You just turned eighteen and become a major (not in the army, that would be Major). You have a separate identity (and may have an identity document for you like Election Card, Aadhar Card, Passport). You may want to do many things independently. You will start earning soon. You may want to have a bank account in your own name.

So why not have a separate tax identity of your own. Or even if you missed the bus (tax identity bus) early at 18, you can board it any time. Sometimes, Government(**) insists that you get this identity.

What do they call it

Here I am. My name is Permanent Account Number. I am your unique identification number with tax authorities, which will give you your tax identity for lifetime. To understand things better, I am a ten characters number containing alphabets and numbers unique to every one of you. For those who like tech, in a PAN, first 3 digits are series of alphabets, 4^th is kind of entity for instance individuals are called Persons so its P, 5th is alphabet your name starts with, next 4 are series or numbers, and last 10^th digit is a check alphabet

How do I get it

There you are. Keen to register with Income Tax? You just need to Apply for PAN (that’s short for Permanent Account Number). It is simple. There is a form (they call it Form 49A).

You need to get it, fill it, sign it and submit it. Let’s read how to fill in PAN module below. Form to apply is downstairs

Pan Module

So you are convinced or keen on getting a Permanent Account Number for yourself. How do you go about it? There is a form (they call it Form 49A).

You need to get it, fill it, sign it and submit it.

”Get it” means download it from Tax department site. Our journey will take us there but for the time being you can take from below box PAN form

”Fill it” means your basic details- the standard- Name, address, date of birth, either parents name, mobile, email, whether you have any income and few more (I will refrain from using etc.)

”Sign it” – You need to sign the form at three places one of them is across photo, but wait,

“Attach”-I need first your two color photos stamp size, your identity proof from below list, address proof from below list . Self-attest these and attach with the form please.

”Submit it”– Submit it to nearest tax (NSDL/UTITSL) centre with Rs. 107 as processing fee (its Rs.994 for a foreign address). Find the centre by doing a google search. They will give you an acknowledgement on submission. There’s an online submission way also where either you fill online and post docs to Tax Department or use a digital sign, but lets just talk traditional way here.

”Hey” you can do everything (means get this identity) online also, we’ll come to that later

”When do I get”– Fortnight is a good time to expect a courier at your home with the PAN card. You will get a SMS and email when its baked and ready to serve. You can in the interim review your application status at Income Tax site, but we promised that later.

When the Govt tells me to get a PAN

Hey you should know when you must have a PAN. Govt says as soon as you meet any of following conditions, you should (and you better) get a PAN, giving only a few common ones:

4a. When your earning (“income” in tax parlance) reaches the taxable limit or level – lets say for a moment that such level is Rs 2.5 lacs in a year (year will always mean April to March). So if you are proudly saying that you earned Rs. 2.5 lacs in a year, you need to press the Get Pan button if you don’t have.

4b. When you doing business, and your sales or turnover in a year reach a level of Rs.5 lac.

4c. If you are entering a specified (By Govt) financial transaction, you need to mention PAN in those, so either you get PAN else you can fill up a form (called Form 60) saying that you don’t have a PAN. Specified financial transactions defined by Govt include activities like opening a bank account, demat account, getting a credit card, doing some transactions over Rs 50k in single time such as : cash deposits in bank, cash payments for hotel bills or travel, investment in mutual funds, bonds; purchase of shares over Rs 1 lac per transaction; any goods purchase over Rs 2 lacs per transaction; sale or purchase of any immovable property at a value/ stamp duty value over Rs.10 lac; to name a few.

PAN Apply

PAN correction

Introduction

Income Tax Return

This site intends to give you some background about Income Tax Return, a term you would have often heard.

We will split it into three parts:

Income

Tax

Return

First we will understand Income, then Taxes and then Returns

Income

Income means anything you earn. The Government counts a year April to March as the determination period for income. What you earn in every year April to March is your income for that year. Income has a wide spectrum and includes various elements. Think of a marriage party which has various classifications in meal courses – Snacks, Beverages, Main Course, Breads and Sweet Dish. You may actually eat or take not necessarily all of them. Similarly income has various classifications- we will talk about it categorywise:

You may be employed and getting salary or retired and getting pension

You may be getting rentals on houses you own

You may be doing business or engaged in profession and earning from there

You may have sold some property, some stocks, sold or done a switch or STP on some mutual funds or even some jewellery or painting. This may result in some gains or loss.

You could be earning interest from bank or investment or any miscellaneous activity like renting out some machinery.

We total these up for a year and get what we call Total Income for a year. There are some incomes or earnings for which you get a free “Pass” in the sense you don’t have to pay any tax on them. We call these Exempt.

Tax

Tax is a charge you pay every year to the Government related to the income you have earned that year. Its your contribution to the country which the Government will use or spend for various spending needs. Government declares tax rates for the next year April to March before start of the year in the budget (they call it Finance Bill for the year), so that it gives you and the Government an idea of what you will pay and what Government will get. The way taxes are charged in India is called slab rate, which means people with lower incomes are charged lower rates, and as incomes rise, taxes (viz tax rates) rise. But not everyone is charged to tax. There’s a generic income limit each year, so if you are below or upto that level of income, there’s no tax for you. Lets say this limit is Rs.2,50,000 if you are below 60 years of age. When you reach 60, Government salutes you as Senior Citizen, and raises the (no tax) income level to Rs.3,00,000. When you further reach 80 years, Government further salutes you as Super Senior Citizen and the income level for you to be out of tax box is Rs.5,00,000. When we are talking of income levels, it is for incomes totalled up for a year (April to March).

Return

Return is a form you will file with the Government every year if you have Total Income over the Taxable Limit for that year. We talked about income levels or taxable limits just now as Rs.2.5 lacs for a person below 60 years, Rs.3 lacs for a Senior Citizen (when you reach 60 age), and Rs. 5 lacs for a Super Senior Citizen (when you reach 80 age). So if you are below these levels, there’s no Income Tax Return for you.