This number is almost mandatory for financial transactions such as opening a bank account, receiving taxable salary or professional fees, sale or purchase of assets above specified limits.
The primary purpose of PAN is to bring a universal identification key factor for all financial transactions and indirectly prevent tax evasion by keeping a track of monetary transactions of high net worth individuals.
The PAN is unique, national, and permanent. It is unaffected by a change of address, even between states. This number can be considered to be similar to Social security number issued in United States to citizens and other legal residents.
Know About Pan
NECESSITY OF PAN NUMBER
As per the current Income Tax Rules and regulations read with Income Tax Act, PAN Number is Compulsory to quote in the following types of transactions.
A. Purchase of Assets : -
1. Any contract for sale or purchase of securities of a value of exceeding Rs.1 lakh
2. Making an application to any mutual fund for purchase of its units for an amount of Rs.50,000 or more;
3. Making an application to a company for acquiring shares for an amount of Rs.50,000 or more. However, this provision shall apply only for public issue or right issue and not for purchase through stock broker and from shareholder;
4. Making an application to a company or institution for acquiring debentures for an amount of Rs.50,000 or more;
5. Making an application to Reserve Bank of India for acquiring its bonds for an amount of Rs.50,000 or more;
1. Sale or purchase of any immovable property valued at Rs.5 lakhs or more;
2. Sale or purchase of motor vehicle or vehicles, as defined sec.2(28) of the Motor Vehicle Act, 1988 (Other than a two-wheeled motor vehicle, whether having any detachable side car having extra wheel attached to such two-wheeled motor car or not) ;
B. Transaction with Banks/ Post Office
1. Opening an account with a banking company;
2. A deposit, exceeding Rs.50,000 in any account with Post Office Saving Bank;
3. A Time deposit with a banking company exceeding Rs.50,000. In case of a minor opening a time deposit account or any other account with a banking company and who does not have any income chargeable to Income-tax, he shall quote the Permanent Account Number of his father or mother or guardian, as the case may be;
4. Cash payment for purchase of bank drafts or pay orders or bankers cheque from a banking company for an amount aggregating Rs.50,000 or more during any one day.
5. Cash deposit aggregating Rs.50,000 or more with a banking company during any one day.
6. Making an application to any bank or banking institution or any company or any institution for issue of a credit card.
C. Other Transactions
• Making an application for installation of a telephone connection including a cellular phone.
• Payments to hotels and restaurants against their bills for an amount exceeding Rs.25,000 at any point of time.
• Cash payment exceeding Rs.25,000 in connection with travel to any foreign country at any point of time.
• Demat account opening
• Getting Loan
• Applying for VISA or Passport
• Rental Income
• Foreign Remittance
D. FAILURE to produce Pan card ATTRACTS HIGHER TDS
Transactions which are liable to TDS at otherwise lower rates like (Contractors Payments @ 1%/ 2%); (Commission/
DUPLICATE PAN CARD
If you are a non-resident Indian who has lost or misplaced his original pan card, then you are eligible to apply for a Duplicate or a Replacement card. For this, NRI needs to provide a PAN proof showing that he had a PAN number before. Examples: Old PAN Card copy OR Any Government document showing the IT PAN Number.
It's very important for NRIs, PIO& OCIs to keep their PAN cards updated. PAN Card is a very sensitive Indian ID proof document, thus it becomes very important that even non-resident Indians living abroad keep their records updated in the Income Tax Department of India. These 'Corrections or Changes' can vary from: Address Change, adding foreign address, Name change or correction in name, signature mismatch, father name correction, surname change, maiden name change and many other significant changes in your Indian PAN Card Number