The PAN (Permanent Account Number) Card is a crucial doc in India for a number of causes. It serves as a singular identifier for people and entities in India for tax functions. It is obligatory to cite the PAN whereas submitting earnings tax returns, and it is usually required for sure monetary transactions reminiscent of opening a checking account, investing in mutual funds, and shopping for property.
What Is A PAN Number?
The Permanent Account Number Card is a singular 10-digit alphanumeric identifier that’s issued by the Indian Income Tax Department. The PAN card serves as a singular identification quantity for people and entities in India for tax functions.
PAN card is issued within the type of a laminated card, by the IT Department, who applies for it or to whom the division allots the quantity with out an software.
How To Read A PAN Card Number?
According to the knowledge obtainable on the official web site of the IT division, a typical PAN is AFZPK7190K.
First three characters i.e. ‘AFZ’ within the above PAN are alphabetic collection operating from AAA to ZZZ.
Fourth character of PAN i.e. ‘P’ represents the standing of the PAN holder. ‘P’ stands for Individual, ‘F’ stands for Firm, ‘C’ stands for Company, ‘H’ stands for HUF, ‘A’ stands for AOP, ‘T’ stands for TRUST and so on..
Fifth character i.e. ‘K’ within the above PAN represents the primary character of the PAN holder’s final title/surname.
Next 4 characters i.e. ‘7190’ are sequential numbers operating from 0001 to 9999.
Last character i.e. ‘K’ is an alphabetic verify digit.
Why PAN Card Is Required?
The PAN card can be required for people to avail sure authorities advantages reminiscent of subsidies and pensions.
The PAN card serves as a legitimate proof of id and is accepted as a legitimate type of identification throughout India.
The PAN card is required for all monetary transactions exceeding a sure restrict. For occasion, any transaction of Rs. 50,000 or above within the banking system requires quoting of PAN.
In easy phrases, the PAN card is a crucial doc for people and entities in India for taxation, identification, and monetary transactions.
PAN allows the division to hyperlink all transactions with the division. These transactions embrace tax funds, TDS/TCS credit, returns of earnings, specified transactions, correspondence, and so forth. PAN, thus, acts as an identifier for the individual with the tax division.
Why Is It Necessary To Have PAN?
It is obligatory to cite PAN on return of earnings, all correspondence with any earnings tax authority. From 1 January 2005 it has develop into obligatory to cite PAN on challans for any funds as a result of Income Tax Department.
It can be obligatory to cite PAN in all paperwork pertaining to the next monetary transactions :-
1) Sale or buy of a motorcar or car aside from two wheeler autos.
2) Opening an account [other than a time-deposit referred at point No. 12 and a Basic Savings Bank Deposit Account] with a banking firm or a co-operative financial institution
3) Making an software for the problem of a credit score or debit card.
4) Opening of a demat account with a depository, participant, custodian of securities or another individual with SEBI
5) Payment in money of an quantity exceeding Rs. 50,000 to a lodge or restaurant in opposition to the invoice at anyone time.
6) Payment in money of an quantity exceeding Rs. 50,000 in reference to journey to any overseas nation or fee for buy of any overseas foreign money at anyone time.
7) Payment of an quantity exceeding Rs. 50,000 to a Mutual Fund for buy of its items
8) Payment of an quantity exceeding Rs. 50,000 to an organization or an establishment for buying debentures or bonds issued by it.
9) Payment of an quantity exceeding Rs. 50,000 to the Reserve Bank of India for buying bonds issued by it.
10) Deposits of money exceeding Rs. 50,000 throughout any at some point with a banking firm or a co-operative financial institution.
11) Payment in money for an quantity exceeding Rs. 50,000 throughout any at some point for buy of financial institution drafts or pay orders or banker’s cheques from a banking firm or a co-operative financial institution.
12) A time deposit of quantity exceeding Rs. 50,000 or aggregating to greater than Rs. 5 lakh throughout a monetary 12 months with –
(i) a banking firm or a co-operative financial institution
(ii) a Post Office;
(iii) a Nidhi referred to in part 406 of the Companies Act, 2013 or
(iv) a non-banking monetary firm
13) Payment in money or by the use of a financial institution draft or pay order or banker’s cheque of an quantity aggregating to greater than Rs. 50,000 in a monetary 12 months for a number of pre-paid fee devices, as outlined within the coverage tips for issuance and operation of pre-paid fee devices issued by Reserve Bank of India underneath part 18 of the Payment and Settlement Systems Act, 2007 to a banking firm or a co-operative financial institution or to another firm or establishment.
14) Payment of an quantity aggregating to greater than Rs. 50,000 in a monetary 12 months as life insurance coverage premium to an insurer
15) A contract on the market or buy of securities (aside from shares) for quantity exceeding Rs. 1 lakh per transaction
16) Sale or buy, by any individual, of shares of an organization not listed in a recognised inventory change for an quantity exceeding Rs. 1 lakh per transaction.
17) Sale or buy of any immovable property for an quantity exceeding Rs. 10 lakh or valued by stamp valuation authority referred to in part 50C of the Act at an quantity exceeding ten lakh rupees.
18) Sale or buy of products or companies of any nature aside from these specified above for an quantity exceeding Rs. 2 lakh per transaction.
In case of a minor, an individual can quote the PAN of his/her father or mom or guardian offered the individual doesn’t have any earnings chargeable to income-tax.
Any individual, who doesn’t have PAN and enters into any of the above transactions, could make a declaration in Form No.60.
It should be famous that quoting of PAN is just not required by a non-resident in a transaction referred at level No. 3 or 5 or 6 or 9 or 11 or 13 or 18.
Also, any one who has an account (aside from a time deposit referred at level no. 12 and a Basic Saving Bank Deposit Account) maintained with a banking firm or a co-operative financial institution. He will likely be required to furnish his PAN or Form No.60 on or earlier than 30-06-2017 if he has not quoted his PAN or furnished Form No. 60 on the time of opening of such account or subsequently.
Linking of PAN with Aadhar Number
As per part 139AA within the Income-tax Act, 1961, it’s obligatory for each individual, who’s eligible to acquire Aadhaar, to cite his Aadhaar quantity whereas making use of for PAN or furnishing return of earnings with impact from July 1, 2017.
Read all of the Latest Business News right here
