Permanent Account Number (PAN) is a unique 10-digit alphanumeric identity that will be issued to all the tax payers in India by the Income Tax Department. This works under the supervision of Central Board of Direct Taxes. This PAN can also be used as an identity proof. For more information please visit tin.tin.nsdl.com.
Even though it is not mandatory to take PAN card unlike Adhaar card, you can apply if your income is beyond the limits that you need to pay a tax, i.e., if you are eligible to pay income tax to the Government then you must and should have a PAN card to do so. All the transactions you make can be recorded with the income tax department with the help of PAN card as your account number is associated with it.
This PAN card is the unique card that is issued to each depending on their requirement. The main motive of introducing PAN card is to bring universal identification to all financial transactions so as to avoid tax evasions that would impact the economy. Every individual having a PAN card and is eligible to pay the income tax could benefit a lot to the economy.
There are many people who even though are eligible to pay the tax to try to cheat the government by paying less tax than they have to pay or totally skip it. So to get rid of such things income tax department has made the use of PAN card mandatory.
There are many pros and very few cons associated with the use of PAN card. Let us see what those pros and cons are.
Pros of PAN Card
1. To open a new bank account
It is very important to produce a copy of PAN card while creating a new bank account. Let that bank account be private/public/co-operative it is must submit a copy of PAN card there; however recently few banks are allowing creating bank accounts without PAN card too.
2. Applying credit or debit card
Most of the people these days are having both credit and debit cards. It is not that easy to get a credit or debit card. While applying for credit or debit cards, it is mandatory to submit the proof of copy of your PAN card. Especially with the debit card, it is mandatory to submit the copy of PAN card. If not submitted then the application will be rejected immediately.
Central Board of Direct Taxes has mandated to provide particulars of the PAN card if the insurance holder has an insurance that is exceeding Rs. 50,000 in a year.
4. Buy a vehicle
If you are planning to purchase a car or any vehicle that costs more than five lakhs, then PAN is mandatory.
If you are buying or selling a plot or property that costs more than five lakhs then again PAN is mandatory. Without the PAN this won’t be possible.
If you are planning to buy some Jewelry, which is a worth of 5 lakhs or more needs a PAN number for sure.
7. Telephone connection
There is an absolute need to have PAN to get a new phone connection. The government has made it must provide PAN details for the telephone connection to keep track on terrorism, extorsion charges etc.
8. Fixed deposits
If you are planning to open an account for fixed deposit or cash deposit of about Rs. 50,000 there PAN is mandatory. If the PAN is not submitted the TDS will be deducted at 20% if the interest amount if the fixed deposit exceeds 10,000.Rs.
Cons of PAN card
There are no disadvantages of using PAN card in general, but once you are allotted with a PAN, you must and should pay the income tax to the income tax department, but not every person who has PAN card is eligible to pay income tax. Only people whose income is more than the line of income paid by the department of income tax are eligible to pay the tax. If you want to know more about your PAN, then please read the F.A.Q page at the official website.