A PAN card is necessary for minors if their parents intend to name them as a nominee for any investments. We discuss the need for a PAN card for minors and how to obtain one.
There is a misconception that pan cards are only issued to persons over 18 years. In fact, PAN cards are also issued to children for use as identification documents and financial purposes. A minor's parent or legal guardian may apply for a PAN card. The Income Tax Department has made the process very convenient.
When Is A PAN Card Necessary For Minors?
A PAN card is legally required if you intend to name your children as a nominee for your investments, such as real estate or other financial assets. In addition, it is necessary if you want to invest in your child's name.
Income earned by minors from investments or other sources is not taxable and is included in the parent's income. It is, however, taxable when they start earning based on their skills, knowledge, and talents. So, in such circumstances, a PAN card is a must for minors.
The parent or the legal guardian should have a PAN card to open a bank account for the child or a Sukanya Samriddhi Yojana account for a minor daughter.
Identity proof, address, and age must be attached or uploaded with PAN card application. However, address proof and identity of a parent or guardian will be considered in the case of minors. The minor's proof of birth must be uploaded or attached.
The PAN is an electronic system through which all tax-related information is recorded against a 10 digit alphanumeric number. Using a PAN card, the Income Tax Department of India can keep track of financial transactions.
In addition, PAN cards are essential for determining the tax liability of an organization or an individual. Furthermore, they reduce the possibility of tax evasion.
How To Obtain A Pan Card For Minors
Detailed instructions for filing Form 49A can be found at https://tin.tin.nsdl.com/pan/Instructions49A.html.
You can apply for PAN card at https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html
At the webpage, select application type as 'New PAN – Indian Citizen (Form 49A)' and the category as 'Individual'. As instructed, complete Form 49A with all the details.
After documents and photograph is uploaded, proceed to make the payment of the fee via debit card, credit card, demand draft or net banking.
Once the payment has been made, an acknowledgement number is provided that can be used to track the status of the application.
The PAN card in the name of a minor must be updated when the minor becomes a major.