The Income Tax Department of India issues a minor's PAN card, also known as a Minor PAN, which is an essential financial record. For individuals under 18, it acts as a tool for identity and tax assessment. This post will explain what a Minor PAN card is, why it's important, how to apply, and the important things to remember.
A Minor PAN Card: What Is It?
It is essentially a PAN card or Permanent Account Number that is given to anyone under the age of eighteen. The Income Tax Department assigns PANs, which are unique 10-character alphanumeric numbers, to track financial transactions and tax-related activities. Minors can own a PAN card for various uses, such as accepting gifts, investing, and opening bank accounts.
Importance of a PAN Card for Minors
A Minor PAN Card is important for the following reasons:
1. Complying with Tax Rules
It is legally required for minors to possess a PAN card to receive income from investments or any other source. Even for minors, compliance with tax rules is mandatory.
2. Investment and Financial Transactions, Gifting and Inheritance
Whether it is trading in stocks on the stock market or opening a bank account, everything requires a PAN card. Thus, if you are a minor who performs several financial transactions, you must have a PAN card. A PAN card is necessary for documentation and tax-related reasons when a minor inherits or receives gifts from an executor or donor.
4. Education Loans and Compliance with Tax Laws
If a minor intends to study overseas, they may require a PAN card to qualify for education loans. Minors must learn about tax laws and ensure their financial transactions adhere to relevant laws. PAN card acts as proof of evidence when it comes to tracking your financial transactions.
How to apply for a Minor PAN Card
Obtaining a Minor’s PAN card involves the following steps:
1. Get the Application Form
Form 49A, which helps you apply for a PAN card, can be downloaded from the Income Tax Department's official website or picked up in person at PAN service centres or TIN facilitation centres.
2. Provide Accurate Information
Provide correct information in the application form. A legal representative, usually a parent or a guardian, must sign on the minor’s behalf if the minor is aged under five years. Minors between five and eighteen must sign, but approval is required from their parents or legal guardians.
3. Provide Documentation
The following documents must accompany your application:
- Identity proof (birth certificate, Aadhar card, school ID, etc.)
- Proof of address, such as a passport or Aadhar card
- Proof of birth certificate or age
- Pictures of the minor with their parent or legal guardian
- A copy of the parent or guardian's PAN card
4. Cover the Cost
Applications for PAN Cards are subject to a processing fee. Depending on whether you prefer an e-PAN card or a physical card, the cost will change.
5. Send Your application
You can apply to any local PAN service centre or TIN facilitation centre once the application form and supporting documentation is ready for submission. Additionally, you have the option to apply online via the official website.
6. Monitor the File
To find out when your Minor PAN Card is available for pickup, you can check the status of your application online.
Important Things Minor PAN Card Holders Should Know
Here are a few important things that you must know about PAN cards for minors:
1. Updating Information
As minors become majors, their personal information might change, so it is imperative to update the information on the PAN card.
2. Using PAN
Although minors might not have a regular source of income, they can manage savings, investments, and other financial activities with their PAN card, frequently with parental or guardian supervision.
3. Tax Filing
If a minor's income exceeds a particular threshold, they may be compelled to file tax returns even if they may not have a taxable income.
4. Handover to the Minor
The minor should take ownership of their financial affairs and have their PAN card switched to their name once they turn eighteen.
5. Responsibility
Teaching minors the value of a PAN card and their financial duties is essential. They can make better decisions if they have enough financial literacy.
Conclusion
In conclusion, a Minor PAN Card is an important document that permits minors to participate in various financial transactions and guarantees adherence to tax laws. When it comes to teaching minors how to manage their finances and use their PAN cards responsibly, parents and guardians are essential. Adhering to tax regulations and completing the application process appropriately can help minors set themselves up for future financial security.
What to do if a minor’s PAN card is lost or misplaced?
If a minor’s PAN card is lost or misplaced, application for a new PAN card can be made. The process is similar like the one applicable to regular PAN card holders.
When should you update the photo of a minor on the PAN card?
When a minor turns eighteen, you can update the photo of the minor on the PAN card
Is a minor’s PAN card valid for a lifetime?
A minor’s PAN card is valid only until they turn a mjor, i.e. eighteen years. Further, it must be updated with latest information.