Why Pan Card is Necessary: PAN or Permanent Account Number is a unique 10 digit alpha numeric code number that is issued by the Income Tax Department to every taxpayer. It is commonly used as an Identity proof in India. Pan card is necessary because of the following reasons.
Why Pan Card is Necessary
1. Track Financial Transaction
It is used by the income tax department to track the financial transaction of the tax payers so that nobody evades the tax payments. It is a way by which government ensures all the tax payments.
2. Income Tax Return
It is a necessity for filing the ITR (Income Tax Return) which is extreamly important for the tax payers.
3. Applying for Debit and Credit card
It is required while applying for debit and credit cards. In the absence of the PAN number the application of debit or credit card is right away rejected. Rejection for a credit card might even spoil your credit score thereby creating problems in taking loans in future.
4. To Purchase Jewellery
PAN card is must if you have to purchase jewellery valued over 5 Lakhs. The PAN card number is submitted with the jeweler for the same.
5. Fixed Deposits
It is necessary for purchasing any security or for fixed deposits if the amount exceeds 50,000. If one fails to submit the PAN card details then TDS is deducted at 20% for interest amount exceeding a value of 10,000.
6. Currency Conversion
It is required while converting the Indian currency into foreign currency when you plan to travel abroad and need the currency. All the money exchanging institutions, banks or bureaus look out for your PAN card number before converting the amount so as to keep a record of the money being converted.
7. Buying And Selling Property
PAN card needs to be presented while buying or selling property or any immovable asset whose value exceeds 5,00,000. The PAN card number is mentioned in the property document.
8. Loan Application
Details of the PAN card are also submitted while applying for loan. Both banks and loan providing institutions look out for your PAN card before providing any kind of loan. Be it educational loan, home loan or a personal loan, the PAN card is necessary.
9. Cash Deposits
For making cash deposits over 50,000 PAN card details need to be submitted with the bank. To prevent money laundering, banks need to report all big transactions to the RBI and the PAN card number is mentioned along with.
10. Opening Bank Accounts
It is required for opening any bank account whether it is public, private cooperative or other banks. Whether you need to open a savings account or current account, it is required for both.
11. Insurance Policy Premium
Insurance policy holders need to provide the details of the PAN card for premium amount exceeding 50,000 in a year.
12. For Buying And Selling Vehicles
For buying or selling vehicles whose value exceeds 5, 00,000 PAN card details are compulsory.
13. For Phone Connection
For getting mobile phone or landline phone connections the PAN card is necessary. This step has been initiated to stop terrorism, extortion etc.
14. For Hotel Bills
While travelling or staying in a hotel if the bill exceeds 25,000 then PAN card needs to be submitted along.
15. For Demat Account
For opening a Demat account the PAN details are to be compulsorily submitted. If one fails to submit the details then the application is rejected.
Conclusion: Why Pan Card is Necessary
Thus PAN card is not just an identity proof used all across India but it is much more than that and is required for whole lots of financial transaction which makes it a must have document for everybody. Getting a PAN card is very easy these days with the whole procedure being online.
A smart card is issued by the Income Tax Department under the supervision of CBDT and the photocopy of the card is applicable everywhere as an identity proof and the number is to be provided for transaction exceeding the prescribed limits. That’s all about the Why Pan Card is Necessary.