The importance of Permanent Account Number (PAN) card has grown over the years, and it is today an essential part of our lives. The most important purpose of allotting PAN to an entity is for the purpose of identification and to track all the related monetary information of that entity. Initially, the significance of PAN was for filing income tax returns.
Over time, PAN was used in dealings with the stock markets, banks and purchase of real estate and vehicles. Today, PAN has started finding use in unconventional areas as well, as follows:
- Bank Fixed Deposits: If you open a fixed deposit with your bank for an amount exceeding Rs. 50,000, a copy of PAN card needs to be given. In absence of PAN, the bank will deduct TDS of 20% or at the prevailing rate, whichever is higher (instead of the normal 10%). Further, the bank will not issue TDS certificate. Form 15G/15H and other exemption certificates will be invalid in this case.
- Payment in Hotels and Restaurants: You may asked to submit a copy of your PAN if you pay cash in hotels or restaurants against bills for an amount exceeding Rs. 25,000
- Payment to Travel Agents: Cash payment more than Rs. 25,000 for travel to any foreign country (fare or purchase of foreign currency) in a single payment requires you to produce your PAN copy
- Rental Agreements: Nowadays, landlords demand a copy of the PAN card of tenants, as the primary ID proof, while letting out their property.
- Jewellery shops: High-value purchase of jewellery in cash should be accompanied by a copy of the PAN card of the buyer, mainly as a means to curb black money usage.
Other usages of PAN include:
- Payment in Second Hand Car Dealings
- Installation of Telephone
- Visa Facilitation Centres
It is seen that quoting or producing a copy of your PAN card is compulsory in practically every money transaction, and not restricted to Income Tax dealings. The significance of PAN cannot be questioned as this has become the primary document sought in all important legitimate dealings.
Do NRIs require PAN Card?
As PAN is required for any financial transaction in India, an NRI will need to have a PAN card if he has an income in India and has to file returns, if he wishes to invest in India, when he carries out banking transactions, if he purchases real estate or for any transaction mentioned above.
references : bankbazaar
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