Having a PAN (Permanent Account Number) Card provides you with ample benefits. It is now compulsory to quote your PAN in various types of financial transactions. Therefore, it is pertinent to know “Why should you get a PAN card?”
Permanent Account Number
PAN as we know or Permanent Account Number is non-duplicate and unique number of 10 digits. The regulatory authority is the Income Tax Department.
Whether it is for buying or selling a property or submitting an official fee or even buying or selling of vehicles, you have to mention PAN these days. It provides transparency of transaction and tax for the government.
The fact that this number remains unchanged even with the change of address throughout India makes it indispensable for any transaction in any part.
One must necessarily quote PAN on one’s income return. Since January 2005 quoting PAN on challan for the payments has been made compulsory.
The PAN was introduced by the government to calculate the total tax generated in the country so that the rate of taxation can be fixed in a better manner.
What are the Benefits of a PAN Card?
The advantages of having a PAN card includes-
Photo Identity Proof
The PAN card carries the photograph, name and date of birth. Since a PAN card is unique for every holder, it is dependable and nationally recognized. Hence it is widely accepted as an identity of a person.
Varying Tax Rate
PAN card will save you from lots of trouble such as the worry of being taxed at varying rates. If you have a PAN card, you will not be unnecessarily taxed at varying rates. Taxation becomes simple. It also reduces the risk of paying the tax twice.
Opening a New Bank Account
Having a PAN card is now mandatory for opening a new saving or current bank account, irrespective of the type of bank such as public, private, co-operative or other banks.
Some banks also ask for the PAN in the case of mutual funds or insurance. It is even beneficial for a minor wanting to open an account. However, in such a scenario PAN card of the guardian is considered valid.
Applying for Credit or Debit card
Quoting your PAN is necessary while applying for a debit or credit card. Direct rejection of the plea would be done if you fail to produce the PAN card. In some cases, the limit of credit or getting a loan would be a big problem.
New Salary Account
PAN Card is the most crucial document in the checklist of the documents to be produced to the company you intend to join. The salary account has the PAN number reference to it.
While making a payment to the insurance companies, it is mandatory to furnish PAN details for amount 50,000 and more in a year.
Purchasing or Selling Off Assets
If a person needs to buy any vehicle or property for which he/she needs to pay tax to the government, it is mandatory to produce the PAN card details in case the car or a vehicle or property cost more than five lacs.
Even in the case of joint property, the PAN details of each person are needed. In the case of Jewellery, for example, any high-value jewellery purchases for an amount of more than 5 Lacs also requires the buyer to provide PAN number.
Fixed or Cash Deposits
The permanent account number is also a necessity while opening a fixed deposit (FD) account or a cash deposit of amount more than Rs. 50,000 at any bank.
New Utility Connections
Getting a cellular connection is difficult without a PAN nowadays. The Indian Government has asked all the telecom companies to allow new connections only when a PAN card is produced.
They have also requested to maintain the PAN details of all the connection holders. It is an attempt by the government to keep a check on fraudulent connections as well as related crimes. It is also a step to curb terrorism.
Investing in Vehicles of Investments
Investing in financial vehicles of investments such as Mutual Funds, Equities, debentures or bonds also require an investor’s PAN card details.
People usually talk about having a PAN but fail to understand the necessity. If you wish to carry out a financial transaction of any nature, the PAN is mandatory nowadays.
PAN Card as a necessary document offers you hosts of benefits and makes your life easier.