Need of 'PERMANENT ACCOUNT NUMBER'
 |
| PAN card |
Introduced as mainly a way to identify an individual from taxation
point of view, the PAN card is used for various other purposes as well.
In this post let us have a look at situations where you will need a PAN card and why is PAN card important.
Permanent Account Number is a 10 digit alphanumeric number issued by the Income Tax Authorities under the supervision of Central Board of Direct Taxes or CBDT.
It is a unique number assigned to an individual and is mandatory from
taxation point of view and every individual should have one. The primary
motive and purpose of a PAN card is to track the financial transactions
carried out by individuals so as to keep tabs on any illegal money
laundering and also to avoid tax evasion. However apart from filling your taxes and giving details of your financial transactions, PAN is required for a number of other reasons as well. So when will you need a PAN card in India, let’s have a look.
1. Filling IT returns: The most obvious and primary purpose of getting a PAN card in the first place.
2. Legitimate ID proof: PAN
card is accepted and used as a valid ID proof in all cases and at all
Government and non-government avenues that require an ID proof such as
for passport, ration card, voter ID card, gas and electricity connection
etc.
3. At your Job: Your employer will need your
PAN when you join any company for taxation purposes. Employers deduct
taxes at source or TDS, professional tax etc. Moreover they need your
PAN card to show their outgoings to you in form of salary when they file
their tax returns.
4. Getting telephone connections: While
cellular service providers do accept any alternate government issued ID
proof, Government run operators like MTNL and BSNL may require PAN
details.
5. Opening a Bank account: Banks will
require your PAN when you approach them for opening a new account. This
is because they have to keep tabs on all high cash transactions and
report periodically to the RBI as per RBI norms. And in any case bank
accounts involve money transactions, so PAN is mandatory while opening
bank accounts.
6. Cash Deposits in Banks: If you
deposit any cash of Rs. 50,000 and above, you will be asked to quote
your PAN. Any cash transaction above this limit has to be reported to
the RBI as a rule. This is an effort towards curbing money laundering
and black money.
7. Foreign currency exchange for international Holidays: You
will not get your foreign exchange for your foreign travels if you do
not submit a copy of your PAN card, even if you have a valid visa and
passport and travel tickets. To avail foreign exchange, PAN card is
required.
8. Payments at Hotels: If you make cash payments of over Rs. 25,000 at hotels and restaurants, quoting your PAN is mandatory.
9. Bank FDs: When
you take a bank FD of Rs. 50,000 or more, you will need your PAN card.
Banks also require this because they deduct TDS on the interest you earn
on the FDs.
10. Post Office Deposits over Rs. 50,000: Just like bank FDs, PAN is required in case you open Post Office deposits of Rs. 50,000 or over.
11. Trading in Shares: Share trading is also a place, where you will need PAN card. You will need to furnish your PAN details to your broker as well as Demat and Trading account provider.
12. Mutual Fund Investments: Similar to shares, while investing in mutual funds you will need to have a PAN card and quote the PAN for your mutual fund request to be accepted.
13. Property Transactions: A Property transaction is another time when PAN card is needed in India.
During the sales deed and also at the time of registering the property,
PAN of both the buyers and sellers are required, or else the
transaction cannot be completed.
14. Loans and Credit Cards: Whenever you apply for loans be it Home loan, Personal loan, Credit cards or Credit Card Loans etc. PAN is mandatory. Without it your application will not progress.
15. Vehicle Purchase: You may be asked for a PAN card if you are buying an expensive car or automobile in some cases.
As we saw above, there are a lot of areas where having a PAN has become a necessity. The scope and areas where PAN card is required have slowly-slowly expanded and hence PAN card is important to have and is mandatory in a lot of cases.
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