It doesn’t matter whether you earn or not, you must acquire a PAN card. It is because it works as a global ID for Indians. Also, there are several uses of PAN cards apart from paying taxes or work as an identity proof.
PAN card for banks is important and apart from it we have mentioned all the reasons, why do we need a PAN card?
Go ahead and take a look at uses of PAN cards.
Table of contents
Reasons and Use of PAN Cards
We have mentioned all the reasons and places where use of PAN cards is mandatory even if you are not an eligible taxpayer.
- Identity Proof: PAN card is a legitimate identity proof for every citizen of India globally. Every government and non-government sector accept PAN cards as it is reliable and secure. Other documents like the Aadhaar card and Voter ID are also acceptable as identity proof.
- For Opening a New Account (in a Bank or Post Office): Every individual must have a self-attested copy of their PAN card with them while they apply for opening either a new bank account or post office. But the same rule does not apply to BSBDA (Basic Saving Bank Deposit Accounts). These are the accounts with zero balance. For example – Jan Dhan Khata.
- Cash Deposit or Purchase in Banks: PAN card plays a crucial role in avoiding money laundering while people deposit or withdraw a number of Rs. 50,000 in a single day from the bank. PAN card information is compulsory while purchasing bank drafts, pay orders, banker’s cheque for an amount more than Rs. 50,000 on a single day.
- While Applying for Credit Card: Having your own credit card is very feasible. And, to apply for a credit card you have to give the PAN card to the bank, cooperative bank, or the financial institution you are applying to.
- Fixed Deposit: If as an individual you want to invest Rs. 50,000 or more in fixed deposit with post offices or bank, Nidhi and NBFC companies you will require a PAN card. However, depositing more than Rs. 5 lakh in a year will also require you to share your PAN details.
- For Loan Application: Even if you are not employed, you might have to apply for an education or business loan or personal loan in future. For applying for a loan you will need to share your PAN card details.
- For Life Insurance: Even for applying for life insurance you need a PAN card. The information in the PAN details is also required if the transaction you are making to the insurance company is more than Rs. 50,000 annually.
- Foreign Travel/Currency Exchange: You need a PAN even if you are travelling outside India. And, if the cash payment is related to the currency exchange or foreign travel amounting to more than Rs. 50,000 then you have to give complete information of your PAN card.
- To Buy or Sell Vehicles: For buying or selling motor vehicles (not two-wheelers) you have to give a self-attested copy of a PAN card for transaction.
- To Buy or Sell Property: To sell or buy a property means a big transaction. Therefore, as a buyer or seller, you need to share the details opf the property and PAN card if the transaction amount exceeds the limit of Rs. 10 lakh.
- While Paying Hotel or Restaurant Bill: You have to share your PAN details while paying a hotel or restaurant bill of more than Rs. 50,000.
- While Doing Investments: People often invest a large amount of money as an investment in mutual funds to save tax. But they have to share their PAN details while buying the mutual fund units, debentures, and bonds of more than Rs. 50,000. PAN details are important for opening even a Demat account.
- For Sales or Purchase of Goods And Services: To buy or sell any goods and services with a hefty amount of more than Rs. 2 lakh, then the seller or buyer have to submit their PAN card details.
For Aadhaar Card Application: PAN card is not important but is required while applying for an Adhaar card application. Also linking your PAN card and Aadhar card is important as per the latest rules of the Income Tax Act, 1961.
