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Why Pan Card is Required?
Purpose of having PAN card
The purpose of having a pan card is strengthened from the fact that from 1 January 2005 it has been made mandatory to quote Permanent Account Number (PAN) on challans for any payments due to Income Tax Department (ITD), while filing returns of income and all correspondence with any income tax authority. Thus Purpose of having Pan Card has become mandatory.
Benefits of PAN card
One of the benefits of pan card is eligibility of an individual or entity to enter into transactions of sale or purchase of assets as mentioned below:
Benefits of PAN card also extends to various banking transactions as below:
PAN is required to be quoted in the deed made during sale or purchase of any immovable property valued at five laksh rupees or more.
- Copy of PAN is required during Sale or purchase of a motor vehicles having more than two wheels excluding detachable side-car attached to the two wheeler.
Importance of PAN is emphasized during transactions involving other financial instruments as follows:
- PAN is required for opening a bank account in both private and nationalized banks.
- Banks, private or nationalized, emphasize on importance of PAN to entertain Time Deposit exceeding fifty thousand rupees.
- PAN is also required while making payment in cash for purchase of bank drafts or pay orders or banker's cheques for an amount aggregating to fifty thousand rupees or more during any one day.
- Deposit in cash aggregating to fifty thousand rupees or more with a bank during any one day requires PAN.
Certain Service providers also emphasize on the importance of PAN
- Deposit, exceeding fifty thousand rupees, in any account with Post Office Savings Bank.
- Contract of a value exceeding one laksh rupees for sale or purchase of securities.
- Making an application for installation of a telephone connection (including a cellular telephone connection) requires a PAN.
- PAN is required when payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time is made.
- Payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time also requires PAN.
Advantage of PAN
Advantage of PAN includes deduction of fraudulent transactions, reduce tax evasion, transparency in transactions between buyer and seller.
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