PAN Card Application Rejection – Reasons and What To Do16 May 2019
From buying a property or a car, or investing in the stock market, one thing that is required for such activities is the PAN card.
Issued by the Income Tax Department under Income Tax Act, 1961, PAN stands for Permanent Account Number, a 10-digit number unique alphanumeric imprinted on a laminated plastic card. Linked to all financial transactions made by a particular individual or entity, it prevents tax evasion by individuals and entities.
Everyone whose income is taxable under the Income Tax Act, 1961 are required to acquire a PAN Card, including individuals such as Indian citizens who are residents of the country, NRI (Non Resident Indians), OCI (Overseas Citizen of India) cardholders, PIO’s (Person of Indian Origin); an association of persons; body of individual; Hindu undivided family; firms, companies, and limited liability partnerships; government agencies, artificial juridical person, and local authority; co-operative society, trusts, etc. The Income Tax Department has a detailed record of all major transactions for tax purposes, through the PAN Card
Reasons why the PAN Card Application is Rejected
Although the process of applying for a PAN is easy and convenient and can be achieved both online as well as offline, many times small and avoidable mistakes cause rejection of the application, either completely or the application is withheld for processing PAN Card. Individuals and collective entities have to face issues almost every day due to a rejected PAN Card status.
Let’s take a look at a few most common reasons for a rejected PAN Card application:
A discrepancy in the PAN application form
PAN Card application is filled through form 49A and form 49AA and they both have various fields that need to be filled by the applicant, including personal details such as name, age, date of birth, gender, address etc. Although there are specific columns designated to fill in the required fields, many times, an applicant might fill these details with incorrect information.
A discrepancy in the supporting documents submitted
Along with the form, an applicant also needs to submit supporting documents to the PAN department such as an address or an identity proof. If they are not clear enough for the authorities to recognize in such cases, the application form for PAN can be rejected by UTIITSL or NSDL or wherever the applicant has applied for PAN.
These two are the major reasons for PAN Card rejection.
How to Avoid PAN Card Application Rejection?
Here a few things to remember while filling in the PAN Card application,
- Do not use the initials when specifying the “name” fields in the PAN application form. It is now one of the prime reasons that lead to the application’s rejection. Especially in India, there are various societies that use the initials instead of writing the surname or the middle name. Moreover, if the names mentioned in all the identity proofs and high school certificate do the match the full name in the PAN application form, then the application will get rejected. Also, the PAN database does not accept initials in the name field.
- Mention the PIN Code in the application form without fail. A common tendency to ignore, this is a crucial step as the PAN Card is dispatched by post.
- Landline phone numbers mentioned in the application form must contain ISD and STD Codes. In the case of mobile numbers, it is advisable to fill in the right country code. This step makes it easier for the PAN furnishing authorities to contact the applicants in case a need arises.
- Furnish all valid supporting documents mentioned on the NSDL or UTIITSL website. These are mainly proof of identity of the applicant, proof of address for the dispatch of PAN card, and the proof of age.
- Write in clear block letters and making sure all mandatory fields are furnished to ensure avoiding rejection of the PAN application.
How to Check PAN Card Application Status?
The application form for a PAN Card can be submitted online through two representative agencies namely the UTI Infrastructure Technology and Services Limited (UTIITSL) and the National Securities Depository Limited (NSDL). They both have been authorized by the Income Tax Department to process a PAN Card application, however, the allotment of the PAN number remains in the hands of the Income Tax Department. A PAN Card application is submitted through Form 49A for Indian residents and Form 49AA by non-residents including foreign companies. One can check the status of the PAN Card application, processing status, delivery status, rejection status, etc. online after 7 days of filling an application through NSDL or UTIITSL.
Related Article: Easiest Way To Correct Wrong PAN Card Information
Why is it Mandatory to Obtain a PAN Card?
Let’s take a look at the occasions when it is important to have a PAN Card in India,
- For individuals with a total income exceeding the threshold amount which is not chargeable to tax.
- For charitable trusts when returns are to be furnished.
- For individuals who carry on any business or profession whose total turnover, sales, or gross receipts are or is likely to exceed Rs 5,00,000 in any financial year.
- For individuals who want to obtain an Import Export code by Importer/Exporter.
- For individuals entitled to receive any sum or income after deduction of tax at source.
- For individuals liable to pay excise duty or are a producer or manufacturer of excisable goods, including a registered person of a private warehouse in which excisable goods are stored and also an authorized agent of such individuals who issue invoices.
- For individuals who are registered under the Central Sales Tax Act or the General Sales Tax law of the relevant state or union territory.
- For individuals who intend to perform specified financial transactions where PAN is compulsorily required.
- For individuals making an insurance payment exceeding Rs. 50,000 a year.
- For investing money in a Fixed Deposit (FD) amounting to above Rs. 50,000 in a bank.
- For individuals applying for a business loan to banks or NBFCs.
- As a proof of identity anywhere in the country, and when applying for a passport, voter ID card, driving licence, electricity connection etc.
- For individuals and entities eligible for income tax to file their IT returns.