Why PAN Card is Important: Why is PAN Card important? Know how this unique 10-digit card makes tax payment, banking, investment and large financial transactions easy.
PAN Card Uses: The full name of PAN is Permanent Account Number. It is a unique number of 10 numbers and letters (Alphanumeric) issued by the Income Tax Department of the Government of India. It is the financial identity of every person, company or organization. Just as the Aadhar card tells your identity, similarly PAN shows your tax and financial status. At present, PAN is necessary for banking, investment, tax and many big financial transactions. The document has been created. Let us know how a small card makes your big financial tasks easier…
Why is PAN important?
1. For tax identification
The biggest function of PAN is to keep tax related records at one place. How much tax you deposited, how much TDS deducted or how much refund is to be received, all this is tracked through PAN. For example, if TDS is deducted every month, it gets linked to your PAN. On this basis, tax is calculated when filing Income Tax Return (ITR).
2. To file income tax return
If your income is taxable, then PAN is required to file Income Tax Return (ITR). With this, the Income Tax Department keeps accurate records of your income and tax.
3. In banking and large transactions
PAN is necessary in many major financial transactions, such as opening certain types of accounts in the bank, fixed deposits (FD) of large amounts, investment in shares, mutual funds and bonds, purchase and sale of property, some major banking and financial transactions. Its purpose is to increase transparency in any type of transaction and put brakes on tax evasion.
4. To invest
If you want to make stock market, mutual fund or other investment, then PAN is required. With this, the details of your investment remain in record.
5. Help in preventing financial fraud
Each PAN number is issued only to one person or entity. This makes it difficult to conduct financial transactions using fake identities and the government can keep an eye on fake transactions.
What information is contained in PAN card?
PAN number
Name
Father’s name (in case of individual)
date of birth
Photo
signature
QR Code (in new PAN card)
What can be the problem if there is no PAN?
- There may be problem in filling ITR.
- There may be difficulty in availing the benefits of some investments and banking services.
- Extra documents may have to be provided in many financial transactions.
- In some cases, more TDS may be deducted.
Are both PAN and Aadhaar necessary?
Yes, PAN and Aadhaar both have different functions. Aadhaar is a document related to your identity and address, while PAN is a document related to tax and financial transactions. In many cases, PAN and Aadhaar have to be linked, so that our records remain more accurate and transparent.
Some important things related to PAN
- According to the Income Tax Department, more than 80 crore PANs have been issued in India.
- PAN number is a unique identification number of 10 letters and numbers (alphanumeric).
- Only one PAN is issued to a person. Having more than one PAN is a crime.
- The Income Tax Department uses PAN to keep track of tax records and large financial transactions.
- Crores of ITRs are filed through PAN every year in India.
Content Source: IIncome Tax Department, Central Board of Direct Taxes, Protean eGov Technologies (NSDL PAN Services), UTI Infrastructure Technology and Services Limited (UTIITSL), Income Tax Act, 1961