TRACES (TDS Reconciliation Analysis and Correction Enabling System)
Question and Answer Of PAN
Question and Answer Of PAN
Question (1) : What is PAN?
Answer : Permanent Account Number (PAN) is a ten-digit alpha-numeric number, issued by the Income Tax Department. Each assessee (e.g., individual, firm, company, etc.) is issued a unique PAN.
PAN enables department to link all transactions of the 'person' with the department. These transactions include tax payments, TDS / TCS credits, returns of income / wealth / gift / FBT, specified transactions, correspondence, etc. PAN, thus, acts as an identifier for the 'person' with the tax department.
• PAN structure is as follows: AAAAA9999A. First five characters are letters, next four are numerals, last is a character letter
• If PAN does not follow the above structure, PAN will be shown as invalid
• The fourth character of the PAN must be one of the following, depending on the type of assessee:
C - Company
P - Person
H - HUF (Hindu Undivided Family)
F - Firm
A - Association of Persons (AOP)
T - AOP (Trust)
B - Body of Individuals (BOI)
L - Local Authority
J - Artificial Judicial Person
G - Government
• The fifth character of the PAN is the first character of the surname / last name of the person (in case of personal PAN card, the fourth character is "P") or of the name of Entity / Trust / Society / Organisation
Question (2) : Deductee is foreigner and does not have PAN. Do I need to deduct TDS?
Answer : Yes. Any person who intends to enter into economic or financial transactions where quoting PAN is mandatory, must also have a PAN. In case the person does not have PAN, tax should be deducted at the rate of 20% or higher.
Question (3) : What happens if I have quoted incorrect PAN in the tax payment challan used for depositing my advance / self-assessment tax?
Answer : In such cases, your tax payment details will not be reflected in Form 26AS. It is important for you to correctly state your PAN in the tax payment challan. For correction in challan within 7 days, you need to approach the bank and after 7 days, you may approach the jurisdictional assessing officer.
Question (4) : Can a foreign citizen apply for a PAN? If yes, which form should be used?
Answer : Yes. A foreign citizen can apply for a PAN by submitting Form 49AA at www.tin-nsdl.com.
Question (5) : PAN provided by deductee is invalid, Can deductor deduct TDS on higher rate along with surcharge?
Answer : In case of invalid PAN, TDS along with surcharge (in case applicable) should be deducted at higher rate.
Question (6) : What is PAN verification?
Answer : This functionality helps deductor in verifying whether the PAN provided by the deductee (Tax Payer) is valid as per Income Tax Department database.
Question (7) : How can I verify the PAN?
Answer : Login to TRACES as deductor and click on ‘PAN Verification’ under ‘Statements / Payments’ tab. Enter PAN and select Form Type and proceed. Status of the PAN (whether valid / invalid) and name of PAN holder will be displayed as per PAN database.
Question (8) : What should I do for an error 'This type of correction can be performed only once for this statement' at the time of filing correction for change of PAN?
Answer : Correction of valid PAN to valid PAN can be performed only once. If you have consumed all your attempts, you need to deposit short deduction default amount and file correction to close the defaults.
