PAN Card – Permanent Account Number (PAN)
Permanent Account Number or PAN is a means of identifying various taxpayers in the country. PAN is a 10-digit unique identification alphanumeric number (containing both alphabets and numbers) assigned to Indians, mostly to those who pay tax.
The PAN system of identification is a computer-based system that assigns unique identification number to every Indian tax paying entity. Through this method, all tax-related information for a person is recorded against a single PAN number which acts as the primary key for storage of information. This is shared across the country and hence no two people on tax paying entities can have the same PAN.
When PAN is allotted to an entity, PAN Card too is given by the Income Tax Department. While PAN is a number, PAN Card is a physical card that has your PAN as well as name, date of birth (DoB), and photograph. Copies of this card can be submitted as proof of identity or DoB.
Your PAN Card is valid for lifetime because it is unaffected by any change in address.
Types of PAN
- HUF-Hindu undivided family
Advantages of PAN Card
The key uses of a PAN Card can be illustrated as follows:
For filing tax returns-
Individuals and entities (companies, partnership firms, HUFs, etc.) are required to quote their PAN numbers whenever they file a tax return. This is a mandatory requirement. If there is no PAN card, individuals and entities would be required to pay a flat tax of 30% on their earning irrespective of the income-tax bracket they might fall in. So, for the purpose of taxation, a PAN number is required and one can check PAN card status by PAN number
Registration of business –
companies, partnership firms, Hindu Undivided Families or other entities who seek registration of their businesses cannot do so if they do not have a PAN number to quote in the registration details.
For conducting financial transactions-
A host of financial transactions can be done only if the PAN card no. of the individual/entity is available. Some common transactions facilitated by the PAN card include sale or purchase of any immovable property the value of which is Rs.5 lakhs and above, sale or purchase of any vehicle except a two-wheeler, depositing any amount higher than Rs.50,000 in a bank, buying bonds valued at Rs.50,000 or above, remitting funds outside India, travel expenses made for travelling overseas if such expenses are in excess of Rs.25,000, buying mutual fund schemes, buying insurance policies or shares valued at Rs.50,000 and above,etc.
For availing utility connections-
In many instances when utilities like a post-paid mobile phone connection, LPG connection, electricity connection, internet connection, etc. are required, a PAN card comes in handy. However, it is always recommended that you use alternate ID proof such as DL, Voter ID card, etc. if possible.
For opening a bank account-
Nowadays the bank’s Know Your Customer (KYC) norms have become quite stringent and the PAN card is a primary requirement, banks carry out their individual number verification when opening a bank details.