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Permanent Account Number (PAN) is a unique ten alphanumeric digit issued by the Income Tax Department to its taxpayers. Being integral to all forms of payments, PAN helps them keep track of individuals’ financial activities. You can check out your PAN on your Pan Card. Apart from the PAN, the card displays your name, your father’s name, date of birth, and your photograph and is widely used as a personal ID. One should have a PAN even if their income doesn’t fall in the taxable brackets. Businesses whose turnover exceeds INR 5 Lakh are required to have a PAN card.
What are the advantages of having a PAN Card?
A Pan Card helps the Income Tax Department track the financial transactions that help assess individuals’ or companies’ tax liability and reduce the chances of tax evasion. If you want to open a bank account or purchase/sell a four-wheeler or buy shares, you require a PAN Card. Here’s a list of advantages of having a PAN Card:
Tax Deduction
Taxation is one of the most crucial reasons for you to get a PAN Card. If you fail to link your PAN number with your bank account and have earned more than INR 10,000 annual interest on your savings deposits, the bank will charge 30% TDS instead of 10%.
Claiming Income Tax Refund
Every year, all business entities and individuals need to file for Income Tax Returns which come in handy when you apply for a bank loan. If your TDS turns out to be higher than the tax amount you have paid, you may be eligible for a refund. In that case, you need to link your PAN Card to your bank account to claim your refund.
Starting a business
According to the Income Tax Act, 1961 implemented in 2010, Pan for a Company is compulsory to start a business. Companies need to provide the Tax Registration Number, which can be obtained only by having a PAN Card.
Opening a Bank/Demat Account
You can not open a bank account without a PAN Card except opening a bank account under the Pradhan Mantri Jan Dhan Yojna. If you are opening a savings or current bank account at a public, private or cooperative bank, you’ll require a PAN Card. Even in opening a Demat Account that you can use to hold shares, you’ll need a PAN Card.
To Purchase Foreign Currency
One requires respective currency for their trip to a foreign location. Under the Foreign Exchange Management Act, an individual or entity needs a PAN Card to purchase foreign currency above INR 50,000.
Identity Proof
Apart from voter ID or AADHAR Card, you can present your PAN Card as your proof of identity at financial institutions or any other organization.
Purchasing/Selling of Immovable Assets
PAN Card permits an individual or entity to enter into a transaction that involves selling or purchasing assets. They need to quote the PAN in the deed during the selling or purchasing of immovable assets whose value exceeds INR 10 Lakh.
Bank Drafts, Pay Orders, Cash Deposits, and Banker’s Cheques
Just like you require a PAN Card to open a new bank account, you also need it when you want to make bank drafts, banker’s cheques, pay orders, and cash deposits above INR 50,000.
How to apply for a PAN Card?
Applying for a PAN Card has become very convenient and can be done from anywhere at any time. Visit the NSDL or UTITSL Portal Link to proceed with the online application for a PAN Card. If you are a resident of India, you’ll be charged INR 107 + service tax, and if you are a foreign resident, you’ll be charged INR 994, which you can pay via credit/debit card, DD, or net banking. Fill up your online application and mail your documents to NSDL or UTITSL. Your application will be reviewed, and then your PAN Card will be sent to the address you’ve mentioned in your application. It would help if you made sure that the following documents are valid and close to you during the application process, and it’ll be done swiftly.
Photo ID Proof
You can submit any of the following as a Photo ID Proof: Voter ID, AADHAR Card, Driving License, Ration Card, Copy of your Passport, Arm’s License, Pensioner Card, or ID Card issued by central or state or government bodies.
Proof of Birth Date
For this, you can submit any of the following: Voter ID, AADHAR Card, Driving License, Copy of your Passport, Matriculation Certificate, Marriage Certificate.
Address Proof
You can submit any of the following address proof: Voter ID, AADHAR Card, Driving License, Copy of your Passport, Electricity or piped gas bill, landline or broadband bill, credit card statement.
While making an application for a PAN card, ensure that you provide all the correct information and submit all the required documents.
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