As per the guidelines issued under the Income Tax Act, 1961, the Income Tax Department is responsible for issuing the Permanent Account Number, better known as a PAN, in accordance with the Income Tax Department's guidelines. It consists of a unique 10-digit alphanumeric code imprinted along with other details on a laminated card. All eligible taxpayers, from individuals to Limited Liability Partnerships, can apply for a PAN card in India. Whenever you file an IT return or make a high-value transaction, the card is required.

Introduction

PAN cards have gained increased in importance and popularity over the years due to the fact that they are required for a number of essential functions. In this article, we will take a look at the various uses of PAN cards, and why eligible citizens should apply for one as soon as possible.

What is a PAN Card?

A PAN is a special card with a unique number given by the Indian Income Tax Department. People, companies, and other groups use it mostly for taxes. To get a PAN card, you have to provide basic information.For financial transactions like purchasing real estate or obtaining a loan, it is crucial. By completing an application form on paper or online and submitting supporting documentation, you can apply for a PAN card. You don’t need to renew or replace your card once you’ve received it. Your entire life will benefit from it.

How Does the Government Benefit from a PAN Card?

The Indian Income Tax Department gains greatly from the PAN card. Let’s examine a few of these benefits:

• Buying or selling any vehicles other than two-wheelers
• Opening an account in any bank or Post Office
• Depositing any amount over  ₹ 50,000
• Depositing any amount totaling over  ₹ 5,00,000 in one financial year with any bank, post office, a co-operative bank, Nidhi Company, or Non-banking financial company
• Applying for a new credit card
• Opening a Demat account to deal in securities regulated by the Securities Exchange Board of India
• Making cash payments that are worth over  ₹ 50,000 in any of the following circumstances;

1. 1. To any restaurant or hotel to pay a single bill generated for one incident
   2. Buying foreign currency when travelling to foreign destinations 
   3. Making bank drafts, cheques or pay orders for the payment of any bill

• Making any payment that is worth over  ₹ 50,000 in the following situations;

1. 1. For buying units in a mutual fund company
   2. Additionally, for buying debentures or bonds issued for an organisation
   3. For buying bonds issued by the Central Bank of India or RBI

• Making cash deposits over  ₹ 50,000 within a day with any bank or co-operative bank.
• Payment of any pre-paid instruments over  ₹ 50,000 in any financial year via cash, DD, pay orders or cheques from a bank as per Section 18 of the Payment and Settlement Systems Act, 2007 
• Life insurance premium payment worth over  ₹ 50,000 in any financial year.
• Buying and selling securities worth  ₹ 100,000 or more per transaction.
• Buying and selling shares of a company not listed on the stock exchange for over  ₹ 1 lakh
• Additionally, buying and selling any immovable property worth over  ₹ 10 lakhs or having a stamp valuation worth over  ₹ 10 lakhs
• Buying and selling of either goods or services worth over  ₹ 2 lakhs per transaction.
• A minor individual can make uses of PAN card of their parents or guardians as long as they do earn any taxable income for any of the purposes mentioned above.
• Individuals who do not possess a PAN card can use Form 60 to perform the actions mentioned above.

Structure of PAN Card

• PAN Number: A personal 10-character alphanumeric code for the cardholder
• Cardholder’s Name: The complete name of the cardholder appears on the card
• Date of Birth: The birthday of the cardholder is shown on the PAN card
• Photograph: A photograph of the cardholder is present on the card
• Signature: The cardholder’s signature is also on the PAN card
• Father’s Name: The card includes the name of the cardholder’s father
• Barcode: The PAN card has a barcode that encodes the cardholder’s information
• Issue Date: The date on which the PAN card was issued is present on the card
• Expiry Date: There is no expiration date for the PAN card. A new card could be issued if the cardholder’s information changes.

The first five digits are letters, followed by four numbers and the 10-digit code ends in another alphabet. The first three letters range between AAA and ZZZ, while the digits between the fifth and ninth place range between 0001 and 9999. The fifth character of the PAN number represents the applicant’s last name or surname. In the case of non-individuals, it is the first character of their name. The last letter acts as an alphabetic check digit, whereas the fourth character helps in indicating the PAN holder’s status. The various letters used and their significance is as follows;

• P for individual or person
• T for Trust
• C for Company
• G for Government Agency
• H for Hindu Undivided Family
• A for Association of Person
• B for Body of Individuals
• J for Artificial Juridical Person
• L for Local Authority
• E for Limited Liability Partnership
• F for Partnership Firm

PAN Card Application

Uses of PAN: Applicants can submit their application either via offline or online means. The individual can approach either an NSDL office or use the UTI Infrastructure Technology And Services Limited or National Securities Depository Limited website to apply for a PAN card. The Income Tax Department has issued both these organisations to help with the issuing and processing of PAN cards. However, the Income Tax Department is responsible for the allotment of the PAN number to eligible applicants. Indian residents can apply for a PAN card via Form 49A, while foreign nationals can file Form 49AA to submit their application.

When is it Mandatory to Obtain a PAN Card?

Uses of PAN Card – Having a PAN card is mandatory in the following circumstances and situations;

1. Individuals whose overall or gross income earned is assessable and taxable during any financial year. This means the income they generate exceeds the Income Tax Department’s threshold amount for not being taxable or chargeable.
2. Charitable Trust who has to furnish returns for their donations and income
3. Individuals who run a business or are engaged in a profession wherein their gross turnover exceeds  ₹ 5 lakhs in any year.
4. Any individual or business who wishes to obtain an Import Export code through the DGFT
5. Individuals who need to receive an income after deduction of tax at source has been made by the employer.
6. Individuals who have to pay excise duty, Sales tax or GST 
7. Any producer, manufacturer or creator of excisable goods 
8. Registered individuals of a private warehouse which stores excisable goods 
9. Authorised agents who issue invoices for excisable goods and deal in their sale
10. Individuals and agents who provide services liable for service tax.
11. Individuals who come under the Central Sales Tax Act or any such law in their respective state, or GST registration.
12. Any individual who wishes to carry out a specified financial transaction that requires the PAN compulsorily.

Importance and Uses of PAN Card

If you want to buy a car, house or invest your money, you will need something very important – a PAN card. The Income Tax Department issues the PAN card as a piece of identification to deter tax evasion. It links all of a person’s or business’s financial transactions. This aids the Income Tax Department in keeping track of funds and ensuring that taxpayers pay their taxes on time.

A PAN card can be applied for by several individuals. It is available to Indian citizens living in India, NRI cardholders, OCI cardholders, PIOs, foreigners who are under the Income Tax Act of 1961, companies, governments, and even minors.

Along with aiding the government in keeping track of your finances, the PAN card has several other advantages. It is accepted across the nation as a means of identification. It can be used to submit applications for crucial things including a passport, voter ID, driver’s licence, and more. Therefore, the PAN card is a crucial document that you require for a variety of tasks.

What is the Use of PAN Card?

• Income Tax Returns: You must file income tax returns if your income reaches a specific threshold, which calls for a PAN card
• Opening a Bank Account: A PAN card is required to open a bank account in any form of bank, including public, private, or cooperative banks
• Buying or Selling a Car: Your PAN card information must be submitted when buying or selling an automobile costing more than ₹5,000
• Applying for a Credit or Debit card: When requesting a credit or debit card from any bank or financial institution, PAN card information is necessary
• Purchasing Expensive Jewellery: For buying jewellery worth more than ₹5,00,000, your PAN card details are necessary
• Making Investments: Your PAN information must be submitted if you intend to invest in stocks, mutual funds, or bonds valued more than ₹50,000
• Proof of Identity: A passport, voter ID, driver’s license, and power connection are among the major documents that accept the PAN card as a valid form of identification
• Foreign Exchange Transactions: When exchanging Indian currency for foreign currency, your PAN card details are required
• Property Transactions: For buying, selling, or renting a property, both the buyer and seller must provide their PAN card details
• Loans: When applying for any type of loan, your PAN card details are necessary
• Fixed Deposits: Investing in fixed deposits worth more than ₹50,000 requires providing your PAN card details
• Large Cash Deposits: Depositing cash exceeding ₹50,000 into your bank account requires your PAN card details
• Telephone Connections: To obtain a new telephone or mobile phone connection, your PAN card details need to be provided
• Insurance Payments: Making insurance payments exceeding ₹50,000 requires providing your PAN card details.

Conclusion on Uses Of PAN Card

In addition to handling all of your legal needs, our attorneys are always ready to assist you. Please contact us if you would like assistance with any legal matter. Vakilsearch

FAQs Regarding Uses Of PAN Card

Who can apply for a PAN Card?

Both Indians and people from other countries who live in India can apply for a PAN card. If someone earns money that has tax on it, like salary or from a business, they need to have a PAN card.

Can an individual possess more than one PAN?

No, more than one PAN card is prohibited by law. If someone has more than one, they may be subject to a fine or legal repercussions.

What to do if an individual has more than 1 PAN?

Uses of PAN Card - If a person possesses more than one PAN card, they should return the extras and preserve only one. By submitting an online form or a letter to the Income Tax Department, they can request to return the surplus ones.

Helpful Links

• What are the Steps to Apply PAN Card Online?
• How can I get PAN Card for my company?
• How can I check my PAN NSDL details?