What is the necessity of a Pan Card | PAN is very necessary for all entities and individuals.
It is not only used by the income tax authorities for tracking tax payments but it has now become mandatory for many days of transactions.
To open a new bank account or any investment to any financial concerned, a PAN card is required.
The advantage of having a PAN card
1. IT returns filing
All individuals and organizations eligible for income tax are expected to file their IT returns. A PAN card is required for filing IT returns and it is an application for primary cause individuals and other organizations.
2. Proof of identity
The PAN card serves as proof of valid identification. In addition to voter cards, Aadhaar cards, PAN cards are accepted by all financial institutions and other entities as proof of identity.
3. Tax deduction
An essential reason for getting a PAN card is for tax purposes.
If the entity or person does not associate PAN number with his bank account and the annual interest earned on the savings deposit is more than Rs. 10,000 / - then the bank will deduct 30% TDS instead of 10%.
4. Claim an income tax refund
Many times, the TDS deducted from a taxpayer's income is more than the actual tax he is supposed to pay. To claim additional taxes, the taxpayer must have a PAN linked to his bank account.
5. Start a business
To start a business, a company or any other entity is required to register a PAN in the name of its entity.
Tax Registration Number (TRN) is required for a business that is available only if the entity has a PAN.
6. Open a bank account
All public, private and cooperative banks have made it mandatory to have a bank account in the name of an individual or company to open a savings or current account.
Only under the Prime Minister's Jan Dhan Yojana, a person can open a Zero Balance Account using a voter card or other proof of identity.
7. Open a Demat account
PAN card is also mandatory for an individual or entity to open a Demat account, which is required to hold shares in dematerialized form.
8. Purchase and sale of movable property
One of the advantages of a PAN card is the ability to enter into the transaction of sale or purchase of assets of an individual or entity.
The PAN should be mentioned in the deed prepared at the time of sale or purchase of immovable property worth Rs. 10 lakhs or more.
9. Overseas Travel
50,000 / - PAN card required with cash payment along with travel abroad
10. Time Deposit Post Office, Cooperative Bank, Non-Banking Financial Company Deposit will also
require PAN, the deposit will be added up to Rs50,000/-. It will take five lakh
or more PANs per year
11. Hotel and
Restaurant Bill Payment over Rs. 50,000 / - per year
12. Purchase or sale of
goods and services. Purchase or sale of any product or service is more than
Rs.00 2 lakh PAN is required for each transaction
13. Bank Draft, Pay Order and Bank Card Check With a transaction of more than Rs. 50,000 / - per day, PAN card is required for bank draft, pay order and banker check. This means that only one PAN card will be required for transactions above Rs. 50000 / -. Advantages of Income Tax Authority
1. A PAN card helps the Income Tax Authority to keep an account of all financial transactions which may be essential for assessing the tax liability of an individual or company, it helps to reduce the possibility of tax evasion. The PAN card contains the person's name, date of birth and photograph and is also accepted as proof of identity of the holder.
2. The PAN number is unique for each entity containing the PAN number. Name and address may change or card may be lost or stolen but PAN number will still remain unchanged. Thus, the chances of abuse are low.
3. A minor account can be easily opened through his guardian's PAN card
4. It is a useful tool for
estimating the total tax revenue generated in
5. Who can hold a PAN card to help an entity determines which tax should be levied based on its income?
The following companies may have a PAN card:
Class Signing Personal Self HUF. Doing Company Director Firm / LLP Partner AOP / BOI Authorized Signing PAN
Linked to Aadhaar
A person's Aadhaar card must be linked to a PAN card if he already has an Aadhaar card. Linking will help the nation to solve the problem of multiple PAN cards issued under one name.
If the user's Aadhaar card number is specified, it is also mandatory to link them for tax submission.
Conclusion
As per the above matters mentioned uses and benefits of PAN cards, it will become clear to a person why it is so important to have a PAN card in his daily transactions.
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