Whether you want to buy a car or a house, invest in the stock market or change your Indian rupees into foreign currency, you will need the same thing for all of these things. It’s a PAN card. One of the most important documents today is the Permanent Account Number (PAN) card, which is given out by the Income Tax Department.
The card was made so that people and businesses couldn’t avoid paying taxes. It does this by linking all of a person or business’s financial transactions. So, for tax purposes, the Income Tax Department has a complete record of all major transactions of Pan Number for All Banks.
Indian citizens who live in the country, NRIs (Non-Resident Indians), OCI cardholders (Overseas Citizens of India), PIOs (Persons of Indian Origin), and foreigners who fall under the Income Tax Act of 1961 can all apply for a PAN card. A PAN card can be requested by firms and companies, the government, and even minors.
But the PAN card can be used for much more than just helping the Income Tax department keep track of your finances.
Here are some of the vital ways a PAN card can be used:
Filing IT Returns: Everyone who needs to pay income tax is expected to file their IT returns. IT returns can’t be filed without having a Pan Number for All Banks, which is the main reason why people and other entities apply for one.
Opening a bank account: You need a PAN card to open a new bank account, whether it’s a savings account or a checking account. To open an account with any bank, whether it’s public, private, or co-op, you have to show them your Pan Number for All Banks; else, you may not be able to open the bank account or do FD etc.
Buying or selling a car: If you want to buy or sell a car which is worth over Rs. 5,000, then remember that you have to give the details of your PAN Card when you do the deal to avoid future tax complications and penalties.
Applying for a credit or debit card: By law, you have to give your PAN card information when you apply for a debit card or a credit card at any bank or financial institution. If this isn’t true, the bank won’t give you the card.
Purchase of jewellery: If you want to buy jewellery worth more than Rs. 5,000, you will have to give the details of your Pan Number for All Banks at the time of purchase.
Putting money into investments: putting money into stocks and bonds is seen as a good way to get rich. If you want to buy stocks or bonds, you would have to give your PAN number for any transaction that costs more than Rs. 50,000. This goes for stocks, mutual funds, bonds, and debentures as well.
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Proof of Identity: A PAN card can be used anywhere in the country to prove who you are and how old you are. It can also be used as proof of identity when applying for a passport, voter ID, driver’s licence, connection to the power grid, etc.
Foreign Exchange: If you’re going abroad and want to change your Indian currency into foreign currency, you have to give your Pan Number for All Banks to the money exchange bureau, bank, or other places where you do it.
Property: In India, you now need a PAN card to buy, sell, or rent a property. For a property sale to go through, both the buyer and the seller’s PAN numbers have to be written on the sales deed and any other related paperwork.
Loans: If you need a loan, all loan providers, including banks and other lending institutions, will ask you for information about your PAN when you apply for the loan. All loans, including student loans and personal loans, need PAN information in order to be approved.
Fixed Deposits: If you want to put more than Rs. 50,000 in a Fixed Deposit (FD) in a bank, you will need to give the bank your PAN number. This is done because TDS (Tax Deductible at Source) will be taken out of the FD interest amount by the bank.
Cash Deposits: If you deposit more than Rs. 50,000 in cash at once, you will also have to give your PAN information. This is in line with the RBI’s order, which says that banks should tell the RBI about any large cash deposits to stop money laundering.
Connections to phones: If you want to get a new phone or mobile phone connection, you have to give your PAN information. Without it, private cellular operators won’t give you a connection.
Insurance Payments: The Income Tax Department says that details from a PAN card must be given when making an insurance payment of more than Rs. 50,000 a year.
Also, the Income Tax Department of India has already made a mobile app that lets people pay taxes and keep track of refunds. Using Aadhaar’s eKYC facility, it will also give out Pan numbers for All Banks in real time. The app is linked to the portal for the Ministry of Corporate Affairs. The IT Department has also started a service where people can apply for a PAN card online. This service uses the Aadhaar e-signature or digital signature certification. With the eKYC feature of Aadhaar, entities or people who want to apply for a PAN will be able to verify their information by using their biometrics.
Last but not least, while a PAN card is a crucial aspect of your financial life, what if you want to surrender it? Indian citizens can give up their PAN cards by writing a letter to the Income Tax Assessing Officer in their area, explaining why they are giving up their PAN.
So, by now, you must have become clear of most aspects of a PAN card, right? Ensure not to make any mistakes as it can lead to penalties from the tax department!