If you plan to buy, sell, invest, currency exchange, file ITR, open an account, or indulge in major financial or legal transactions, a PAN card will help verify your background. A PAN card is now a crucial document when doing anything related to government work.
PAN cards were issued so that people or organisations do not evade tax. It links all the financial transactions made by any company or individual. In this way, the ITD department knows about all primary transactions and keeps an eye on those who evade taxes.
PAN card is even necessary for Indian citizens living outside the country. They can be:
- Non-Residential Indians
- Overseas Citizens of India
- Person of Indian Origins and
- Foreigners who come under the Income Tax Act, 1961
- Firms and organisations
Besides these, there are other several uses and importance of PAN cards. We have discussed the uses of PAN card below.
Table of contents
Know the Uses of PAN Card in India
There are several uses of PAN Card one can avail in India. Here are some prominent uses of PAN cards.
Filing Income Tax Return – Every individual and organisation must have their PAN card as it helps in filing the Income Tax and in claiming the ITR refund.
Opening a Bank Account – All public, private or cooperative banks require a PAN card from every individual or entity before opening their bank account. It is a crucial step as a PAN card is considered a valid identity proof of a citizen in India.
Opening a Demat Bank Account – For establishing a Demat bank account, one must have a PAN card. With a Demat account, you can invest in the stock and share market.
Eligibility For Credit/Debit Card – According to rules, while applying for a debit or credit card, it is mandatory for you to provide your PAN card to the financial institution you are applying for credit or debit card.
Fixed and Cash Deposit – For depositing cash of Rs. 50,000 or investing in a fixed deposit amounting to Rs. 50,000, you have to share your PAN card details with the bank. It is mandatory to validate every piece of information about you, from deducting Tax Deductible at Source to money laundering.
Insurance Payments – If your insurance amount exceeds the amount limit of Rs. 50,000, you must share your PAN details with the respective bank. It is a rule mandated by the Income Tax Department of India.
Eligibility For Loans – The uses and importance of a PAN card is visible while you apply for a loan. All the lenders and financial institutions need to verify your background during loan application. Therefore, they need your PAN card information.
Purchasing Jewellery – If you buy jewellery worth Rs. 5 lakh or more, you have to submit your PAN details at the time of billing.
Bank Drafts, Cheques and Pay Orders – A PAN card is required for bank drafts, cheques and pay orders worth more than Rs. 50, 000.
For Investments – Investing in mutual funds, equity or bonds is a good option for building your wealth. However, there are instances where you have to share details of a PAN card. Here are they:
- When you purchase mutual funds of Rs. 50,000 or more
- When you sell or buy securities of Rs. 1 lakh or more
- If you make transactions of Rs. 50,000, or more for investing in securities.
Identity Proof – PAN card is accepted everywhere in India and also accepted as proof of age. It also helps in filling the application form for driving, licence, passport, etc.
Buying or Selling of Vehicles – If you buy or sell a vehicle worth Rs 5 lakh, it is mandatory to share your PAN card details.
Selling/Purchasing/Renting of Immovable Property – You can buy, sell or rent your immovable property after sharing your PAN card details. In the case of buying and selling both parties have to share PAN details for the culmination of the documents and agreement.
Foreign Currency Exchange and Travel – If you are travelling outside India, you probably want to change your currency into a foreign one. While doing so at the foreign exchange office, provide details of your PAN, for converting Indian money into the desired currency.
Purchasing of Services and Goods – You have to submit your PAN card details for purchasing any services or goods worth Rs. 2 lakh or more than
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Frequently Asked Questions (FAQs)
Is having a PAN card necessary for everyone?
Yes, all the tax-paying people who file an income tax return must acquire a PAN card. Further, any person who wishes to be involved in any financial transaction must apply for PAN.
Is PAN a beneficial card for students?
As per the government rules, all individuals must have a PAN card. Every student must have a PAN card, it helps them in taking education loans or leaving the country for higher studies.
Can I get a PAN card if I am a 17-year-old?
Yes, a minor child can get a PAN card. A minor is a child below the age of 18. Therefore, minors cannot apply for a PAN card directly but with the help of their parents or guardians.
Is sharing your PAN number safe?
Sharing your personal information like PAN number can be used by imposters that can lead to identity theft without your knowledge. These false transactions can lead to your involvement in money laundering cases.
Can we share a PAN card copy?
No, you should never share your PAN card copy with an unknown entity or individual. As they can misuse it in several ways. If someone uses your PAN card for filing TDS or TCS then it will be recorded in your Form 26AS later. Hence, never share PAN details with anyone.
How to choose the right PAN card category?
While filling the form ensure that you read the complete eligibility criteria depending upon you are a company, individual, trust, firm, etc. Going further, you can fill the form as asked. Make sure that you fill in correct information matching your Aadhaar.
