Why do you need a PAN Card?

Many people have asked me this question? It is actually ignorance on the part of some of the people to the importance of a PAN card. The salaried class is ofcourse most aware that to purely out of a necessity by the employer for Tax deduction at Source but most of the other people are just purely ignorant Let me first define the PAN Card -

PAN - A ten Digit alpha numeric number issued by Income tax department.

Who Must have a PAN?

i. All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others, must obtain PAN.

ii. Any person, who intends to enter into financial transaction where quoting PAN is mandatory, must also obtain PAN.

iii. The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.

Now the main Question, Why do you need a PAN?

It is necessary to quote the PAN in documents related to the following transactions:

• Sale or purchase of immovable property valued at Rs 5 lakh or more. If there are co-owners (buyer or seller), the PAN of both the owners will have to be mentioned. If a nominee holds the property, the PAN of the legal owner must be mentioned. The PAN should be disclosed in the document pertaining to purchase or sale of the property.

• Sale or purchase of a motor vehicle requiring registration other than two-wheelers. This does not include vehicles running on fixed rails or special vehicles for use only in factories or in other enclosed premises or vehicles of less than four wheels with engine capacity of not more than 25 cc.

• A time deposit of more than Rs 50,000 with any banking company and deposit of more than Rs 50,000 with post-office savings bank. This requirement is not mandatory when investing in post-office National Savings Certificate or Kisan Vikas Patra, and the PAN will be required only if the time deposit exceeds Rs 50,000.

• Contract of sale or purchase of securities exceeding Rs 1 lakh in value, including shares, bonds, debentures, derivatives, units and government securities.

• Cash payment of Rs 50,000 or more for purchase of bank drafts, pay orders or bankersÕ cheques during any one day.

• Cash payment exceeding Rs 25,000 in connection with travel to any foreign country (fare or purchase of foreign currency).

• Application for installation of telephone, including cellular telephone.

• Payment to hotels and restaurants against bills exceeding Rs 25,000 at any one time.

• Opening a bank account.

• Application for issue of a credit card.

• A cash deposit of Rs 50,000 or more with any bank during any one day.

• Payment of Rs 50,000 or more to a mutual fund for purchase of units or to a company for acquiring its shares or to a company/institution for acquiring its debentures/bonds or to RBI for acquiring bonds.

• Minor intending to open time deposit or bank account should quote the PAN of either father or mother or guardian in whose hands income is likely to be clubbed.

A lot of reasons there huh but remember you really do need a PAN card. Its easy. Its not that difficult to get either, Got this website "http://www.utitsl.co.in".

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