7 Key Uses of PAN Card and Its Benefits

PAN (Permanent Account Number) , is a unique 10-digit alpha-numeric code given to entities and individuals earning income in India that falls in the taxable bracket. However, it is a myth, that PAN is required only for those who earn taxable income. A PAN comes with various benefits and uses. Let’s get right to it.

1. Filing ITR: For any individual, resident Indian or an NRI, a PAN is required to be quoted at the time of filing income tax returns.
2. Reduce Tax Deduction at Source (TDS): Quoting a PAN Card at varous places can help reduce the TDS rate. For instance, banks will deduct TDS of 30% on the interest-earned above Rs 10,000 in a savings account instead of 10% if PAN is not furnished.
3. Claiming Tax Refunds: When the tax liability is more than already paid in the form of TDS, the taxpayer can claim refunds. However, the bank account where you want the refund has to be linked to your PAN.

1. Bank Accounts: All bank accounts apart from saving account schemes under the Pradhan Mantri Jan Dhan Yojana , a PAN card is required to be furnished.
2. Demat Accounts: A Demat account is required if you wish to hold the financial securities such as shares, bonds , or ETFs . A PAN card is an an essential requirement while opening the same.
3. NRO Accounts: NRIs need to furnish PAN card details if they wish to open rupee-denominated NRO accounts for storing their income earned from India. However, for NRE or FCNR accounts, Form-60 can be provided as a substitute for PAN.

1. Buying Foreign Currency
2. Paying to Travel Agency
3. Buying Airtickets
4. Making any expense related to travel

1. Cash Deposits in Bank Account: If you are depositing cash in your bank account or someone else’s, you’ll need to furnish PAN details if the deposit is more than Rs 50,000.
2. Demand Drafts and Banker’s Cheque: For issuance of bank draft, pay orders or banker’s cheque exceeding Rs 50,000 , PAN details are a necessary requirement.
3. Hotels and Restaurant Bills: You need to provide PAN details while paying hotels and restaurant bills in cash that exceed Rs 50,000 in value.
4. Cash Payments Related to Travel: Cash payments related to travel exceeding Rs 50,000 for a single travel would need PAN details to be furnished by the traveller such as;
5. Life Insurance Premiums in a Financial Year: If the life insurance premiums exceed Rs 50,000 in a year, the PAN details of the insured is necessary.
6. Payments to Pre-paid Instruments in a Financial Year: Payments to e-wallets, gift cards, pre-paid cash cards exceeding Rs 50,000 in a year would need you to furnish your PAN details.
7. Buying Mutual Funds, Debentures, and Bonds: Buying mutual funds , debentures, or bonds which exceed Rs 50,000 in value in a year, would need you to furnish your PAN details.

1. Any Goods or Services with Invoice Amount Exceeding Rs 2 Lakh
2. Immovable Property and Assets Exceeding Rs 10 Lakhs
3. All Vehicles barring 2-wheelers
4. Securities exceeding Rs 1 Lakh
5. Gold and Bullion exceeding Rs 5 lakh

1. Remitting money out of India
2. Transfering money from NRE to NRO Account

1. For Income Tax Returns (ITR): A PAN card comes in handy for various tax-related formalities such as;
2. Opening Accounts: While opening various accounts, a PAN is required as an essential document. This includes
3. Transactions Exceeding Rs 50,000: Some transactions exceeding Rs 50,000 value either once or in a financial year need PAN details of the parties involved.
4. Buying or Selling: Whether you are buying or selling, you would need to furnish PAN details for;
5. Registering a Business: While registering a business, you need to acquite a unique Tax Registration Number (TRN) which can only be given if you furnish PAN details of your company and of the rightful owners.
6. Foreign Transactions: Irrespective of the value of the transaction, you need to furnish PAN details for various foreign transactions such as;
7. Documentary Proof of Identity: Apart from being required for various transactions and tracking your tax liability, one of the many uses of PAN card is that it serves as a valid identity proof.

Direct tax, accounts for more than 50% of the tax revenues generated in India which is used for funding various social and developmental projects for the betterment of the country and its citizens. Tax evasion, however, is one of the biggest challenges faced by the government with only a small percentage paying taxes rightfully. Giving a unique PAN to every taxpayer helps the government to track the transactions which may attract tax on either or both the parties involved.

The following can apply for a Pan Card

1. Resident Indians
2. NRIs
3. PIOs
4. Overseas Citizenship of India (OCI)
5. Foreign nationals earning income in India.

1. HUF (Hindu Undevided Family) ,
2. Company,
3. Association of Persons
4. Artificial Judicial Person
5. Trust
6. Local Authoties

1. Indviduals
2. All Entities:
3. Foreign Entities Earning in India Minors in India can also apply for PAN by getting the form signed by their parents or legal guardians.

During the Union Budet 2017, linking your PAN with Adhaar was made mandatory. This was done to eradicate the problem of duplicate PAN cards. The last date for linking your PAN to your Adhaar was June 30, 2020.However, the same has now been extended up to 31st March 2021. If you are not able to link it before the due date, your PAN card will be categorised as “Inoperative”. Furning ‘inoperative’ PAN details will be treated as not furnishing any PAN and will result in the same consequences, penalties and charges as not furnishing your PAN details.