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 What importance does PAN hold?

Perks of having PAN Card – PAN Card holds importance for taxpayers to track down the flow of their money and not only this, but it is also important for all kinds of financial transactions. It plays an important role during income tax payments, receiving respective refunds and many more.

In the annual budget session of 2019, it was proposed that Individuals should be allowed to use Aadhaar Number if they don’t have PAN for filing returns and for every other purpose where PAN was mandatory in past. This means that no one is forced now to link Aadhaar and PAN or to apply for PAN. Although, this proposal is still in pipeline and hasn’t got clearance yet.

PAN Card is not only important for tracking money, but also as an identity proof. Some of the other uses of PAN Card are given below:

  • PAN is required for paying direct taxes.
  • Taxpayers have to give their PAN while filing Income Tax returns.
  • PAN is mandatory while registering a business.
  • Transactions given below require PAN information:

*Buying or selling of property worth more than 5 Lakhs

* Dealings of Vehicles except for two­ wheelers.

*Payments against hotels and restaurants above 25000 INR.

*Payments exceeding 25000 INR while travelling abroad.

*Payments of Bank deposits/ Bond deposits/ Trading of shares pr Insurance policy worth more than 50000 INR.

*Purchase of mutual fund schemes

*Payments worth more than RS. 5 lakhs in case of purchasing jewellery or nuggets

*For remittances of money out of India [ ] Advantages of having a PAN Card

  • Helps to track the tax payment as it is used to verify the tax payments.
  • Since, it is a unique identity card, no one can misuse it.

 

 Who are eligible for PAN Card?

According to the Income Tax Act (139A), the following individuals are eligible for PAN Card:

  • Any person who pays direct taxes.
  • Any person running a venture having a turnover of more than Rs.5 lakh in any financial year.
  • Traders who are either paying any direct tax or duty charge accordingly to Income Tax Act.
  • Trusts, NGOs and all kinds of associations, companies are eligible for PAN Card.

 

How to Track PAN Transactions

Recently, the government launched a programme to track down the PAN Card transactions to calculate tax, the program has been named Income Tax Business Application-Permanent Account Number (ITBAN-PAN).

  • All This software is powerful enough to track all the financial transactions where a PAN Card was used.
  • All The government has moved all the existing PAN Card data to this software.
Results of not having a PAN Card?

Not having a PAN Card will cost you:

  • 30% tax imposed on your income as per

the Income Tax. This rule is applied to all entities that are eligible for tax even those which are registered in foreign.

  • You will be disqualified to buy a motor vehicle, or to open a bank account, or can not purchase any immovable property exceeding RS. 10 lakh.