PAN or Permanent Account Number is a ten-digit alphanumeric number issued by the Income Tax Department to an assessee. PAN Card enables the taxes to link transactions of a person which include tax payments, TDS (tax deducted at source)/TCS (tax collected at source) credits and income tax returns. PAN acts like an identifier for a person with the Income Tax Department and it is mandatory for filling of income tax and also for carrying out financial transactions after a certain limit of amount. For example, even depositing of an amount above 50,000 Rs in your bank account, would require the mention of your PAN number.
Here are 10 things to know about the latest PAN rules and why you need a PAN card:
- Quoting of PAN is required for setting up a time deposit – or fixed deposit – exceeding Rs. 50,000 with a financial institution. Also, a cash deposit exceeding Rs. 50,000 in a post office savings account requires PAN number.
- Payment to hotels and restaurants against bills above Rs. 25,000 at any one time requires the furnishing of PAN card details.
- PAN is also mandatory for a contract valued above Rs. 1 lakh for sale or purchase of securities, and payment of Rs. 50,000 or more to a mutual fund for the purchase of its units.
- According to the Income Tax Department, PAN is required for payment in cash for the purchase of a bank draft, pay order or banker’s cheque for an amount of Rs. 50,000 or more in a day.
- The PAN details are also mandatory for a deposit of cash amount of Rs. 50,000 and above in a bank in a day.
- In order to apply for a credit or debit card, PAN details are compulsory.
- Payment of an amount of Rs. 50,000 or more to a company for acquiring its shares, or to a company/institution for acquiring its debentures or bonds also require quoting of PAN.
- Payment of Rs. 50,000 or more in a year as life insurance premium also requires PAN.
- Meanwhile, the Supreme Court has said that linking of PAN with Aadhaar is mandatory for the filing of income tax returns.
- Applications for obtaining a PAN can be made in both offline and online modes. In the online mode, the applicant registers his or her request through the website of securities depository NSDL (National Securities Depository Limited) or financial service provider UTIITSL (UTI Infrastructure Technology And Services Limited). (Read: How to apply for a PAN card online)