India has a huge population and is a huge country. It is the duty of the citizens of this country to pay taxes for the betterment of the country. PAN card is one such card which helps the government to keep a check on the people and differentiate between tax paying and non-tax paying citizens. PAN card or permanent account number, is a unique 10-digit alphanumeric identity allotted to each taxpayer by the Income Tax Department of India under the supervision of the Central Board of Direct Taxes. The authorities that are responsible for accepting and procession the PAN application forms are The UTI Investors Services Ltd (UTIISL) and National Securities Depository Limited (NSDL) Permanent Account Number is a national identification card. No one will be able to carry any financial transaction without a PAN card. The authority allocates the number to a tax-paying person, company or HUF. It has lifetime validity. It is one of the most important documents. It should be kept safe by the person as it helps the person to perform various financial transactions.
PAN card is mandatory for the people of the country in order to execute the normal day to day to financial transactions as well. If you are a taxpayer, it is important that the government has a way to identify the person who has paid the respective tax. The tax that you pay is credited to your account with the Income Tax Department, and at the end of the year, the tax that you may be liable to pay is adjusted to the tax paid the balance that exists in your account already. In case the tax paid in your account is already in excess of your total tax liability, the Income Tax Department will refund the excess tax so paid. PAN card helps the Income Tax Department to identify the person from whom tax needs to be collected or from whom tax needs to be refunded. Thus, it is of very important to have a PAN if you are a taxpayer.
PAN card is necessary or mandatory in the following cases.
- For the payment of direct taxes
- To file the income tax returns
- To avoid any deduction of tax at a higher rate than due
- To enter into specific a transaction such as:
- Sale or purchase of immovable property valued at Rs 5 lakh or more
- Sale or purchase of a vehicle other than a two-wheeler
- Payment to hotels or restaurants an amount exceeding Rs 25,000 at any one time
- Payment in cash an amount exceeding Rs 25,000 related to travel to any foreign country
- Payment of an amount of Rs 50,000 or more to the Reserve Bank of India for acquiring bonds
- Payment of an amount of Rs 50,000 or more to a company or for any institution for acquiring bonds or debentures or shares
- Any mutual fund purchase
- Any Deposit exceeding Rs 50,000 with any single bank in 24 hours
- Payment exceeding Rs 5 lakh for purchase of bullion and jewelry
Also, for the other people, the Income Tax Department has made it mandatory for some organizations also to report transactions with the PAN of the person who has made the transactions. In this way, the department is kept in the loop about the activities you have undertaken. So, even though you are not a taxpayer, you may be asked to provide your Permanent Account number or a copy of the PAN card so that they can identify the person undertaking the transaction and keep a check. This way the government keeps a check on the people s that they do not do any fraudulent activity. Therefore, the PAN card is mandatory for the people to whom the government has asked to.