PAN (Permanent Account Number) Card
What Is Pan Card
A PAN (Permanent Account Number) Card is a unique 10-character alphanumeric identification issued by the Income Tax Department of India. It serves as a key document for financial and tax-related transactions.
Key Features of a PAN Card:
Unique Identification: Each PAN is unique and remains valid for a lifetime.
Issued by: The Income Tax Department of India under the supervision of the Central Board of Direct Taxes (CBDT).
Format: It consists of 10 alphanumeric characters (e.g., ABCDE1234F).
Purpose: Primarily used for tracking financial transactions, filing income tax returns, and preventing tax evasion.
Applies to: Individuals, businesses, trusts, and foreign nationals conducting financial transactions in India.
Uses of a PAN Card:
Filing Income Tax Returns (ITR)
Opening a Bank Account
Applying for a Loan or Credit Card
Buying/Selling Property or Vehicles
Investing in Mutual Funds, Stocks, or Bonds
Receiving Payments Above ₹50,000 (e.g., Salary, Professional Fees, etc.)
Foreign Exchange Transactions
Who Needs a PAN Card?
Individuals:
Indian citizens earning taxable income.
Salaried employees for salary transactions and tax filing.
Freelancers and self-employed professionals (Doctors, Lawyers, CAs, etc.).
Students who wish to invest in mutual funds, stocks, or open a bank account.
2. Businesses & Organizations:
Sole Proprietors, Partnerships, LLPs, Private Limited Companies, and Public Limited Companies.
NGOs, Trusts, and Societies involved in financial transactions.
3. Foreign Nationals & Companies:
Foreign investors or companies conducting business in India.
Foreign citizens earning income in India.
4. Hindu Undivided Families (HUFs):
HUFs engaging in business or property transactions.
5. NRIs (Non-Resident Indians):
NRIs with taxable income in India or investments requiring PAN.
When is PAN Mandatory?
Filing Income Tax Returns (ITR).
Opening a bank account (except basic savings accounts).
Depositing over ₹50,000 in a bank account.
Buying or selling property worth over ₹10 lakh.
Investing in stocks, mutual funds, or bonds.
Applying for a credit card or loan.
Receiving professional fees exceeding ₹30,000.
Foreign travel expenses above ₹50,000.
Benefits Of Pan Card
1. Income Tax Compliance
Required for filing Income Tax Returns (ITR).
Helps track tax payments and refunds.
Prevents tax evasion by linking financial transactions.
2. Essential for Financial Transactions
Required for opening a bank account (except basic savings accounts).
Mandatory for deposits exceeding ₹50,000 in banks.
Needed for buying/selling assets like property, stocks, or bonds.
Required for mutual fund investments and stock market trading.
3. Business & Professional Benefits
Businesses must use PAN for GST registration and filing tax returns.
Used for receiving payments above ₹30,000 for professional services.
Companies and freelancers need it to comply with tax deductions (TDS/TCS).
4. Identity Proof
Acts as a valid government-recognized identity proof.
Used for loan applications, credit cards, and insurance policies.
5. Buying/Selling Property & Vehicles
Mandatory for property transactions above ₹10 lakh.
Required for vehicle purchases exceeding ₹10 lakh.
6. International Transactions
Needed for foreign travel expenses above ₹50,000 (e.g., buying foreign currency).
Required for remitting money abroad under RBI regulations.
7. Simplifies Loan & Credit Approval
Essential for applying for home loans, car loans, and personal loans.
Helps build a credit score for financial credibility.