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PAN Card
Permanent Account Number or PAN card is a crucial piece of document when it comes to taxation. It also serves as identity proof so that you can avail of a multitude of financial services, including opening a bank account, investing in Mutual Funds, or applying for a Credit Card.
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Benefits of Government Through PAN Card
In addition to the benefits, it offers to Indian citizens, the PAN card holds various uses for the Income Tax Department. These benefits are outlined below:
Tracking Financial Transactions: The PAN card enables the Income Tax Department to monitor all financial transactions, which plays a crucial role in assessing the tax liability of individuals and organizations. This helps in curbing tax evasion, making it a significant utility of the PAN card.
Determining Tax Revenue: The PAN card is instrumental in calculating the total tax revenue generated in the country. It aids in evaluating the overall tax contributions and assessing the economic progress of the nation.
Fixing Taxation Rates: The PAN card plays a role in setting the taxation rates for entities based on their income. It helps in determining the applicable tax rates and ensures a fair and efficient taxation system.
Having learned about the numerous advantages of the PAN card, we hope that this guide on its uses assists you in utilizing the card effectively.
What is a Business PAN Card?
A business PAN card refers to a permanent account number (PAN) specifically issued for businesses or entities in India. Business PAN cards are typically required for tax filing, opening bank accounts, legal compliance, claiming tax deductions, and conducting other financial activities on behalf of the business entity.
Business PAN Number Example
PAN has a typical format of ABCFu1234D. The first three characters, i.e. ‘ABC’ in the above number is an alphabetic series ranging between AAA and ZZZ.
The 4th character, i.e. ‘T’, represents the PAN holder’s status. The alphabet ‘F’ represents Firm, ‘T’ represents Trust, , ‘H’ for HUF, ‘P’ for Individual, ‘C’ for Company etc.
The 5th character, i.e. ‘U’, represents the first alphabet of the PAN holder’s last name.
The next four characters are sequential digits ranging between 0001 and 9999. The 10th character, i.e. ‘D’, is an alphabetic check digit that runs from A to Z.
Uses of PAN Cards
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Benefits of Government Through PAN Card
In addition to the benefits, it offers to Indian citizens, the PAN card holds various uses for the Income Tax Department. These benefits are outlined below:
Tracking Financial Transactions: The PAN card enables the Income Tax Department to monitor all financial transactions, which plays a crucial role in assessing the tax liability of individuals and organizations. This helps in curbing tax evasion, making it a significant utility of the PAN card.
Determining Tax Revenue: The PAN card is instrumental in calculating the total tax revenue generated in the country. It aids in evaluating the overall tax contributions and assessing the economic progress of the nation.
Fixing Taxation Rates: The PAN card plays a role in setting the taxation rates for entities based on their income. It helps in determining the applicable tax rates and ensures a fair and efficient taxation system.
Having learned about the numerous advantages of the PAN card, we hope that this guide on its uses assists you in utilizing the card effectively.
Business PAN Cards
What is a Business PAN Card?
A business PAN card refers to a permanent account number (PAN) specifically issued for businesses or entities in India. Business PAN cards are typically required for tax filing, opening bank accounts, legal compliance, claiming tax deductions, and conducting other financial activities on behalf of the business entity.
Business PAN Number Example
PAN has a typical format of ABCFu1234D. The first three characters, i.e. ‘ABC’ in the above number is an alphabetic series ranging between AAA and ZZZ.
The 4th character, i.e. ‘T’, represents the PAN holder’s status. The alphabet ‘F’ represents Firm, ‘T’ represents Trust, , ‘H’ for HUF, ‘P’ for Individual, ‘C’ for Company etc.
The 5th character, i.e. ‘U’, represents the first alphabet of the PAN holder’s last name.
The next four characters are sequential digits ranging between 0001 and 9999. The 10th character, i.e. ‘D’, is an alphabetic check digit that runs from A to Z.
Uses of PAN Cards
IT Returns Filing: All individuals and entities who are eligible for Income tax are expected to file their IT returns. A PAN card is necessary for filing IT returns, and is the primary reason individuals as well as other entities apply for one.
Opening a bank account: A PAN card is required in order to open a new bank account, whether it is a savings or a current account. All banks, whether public, private or cooperative, require the submission of a PAN card in order to open an account with them.
Buying or selling a motor vehicle: If you wish to buy or sell a motor vehicle worth more than Rs.5,00,000, you must to provide your PAN Card details when conducting the transaction.
Applying for a credit or debit card: When applying for either a debit card or a credit card at any bank or financial institution, furnishing your PAN card details is mandated by regulations. The bank will not issue the card if this criterion is not met.
Purchase of jewellery: If you are looking at buying any sort of jewellery that is valued at over Rs.5,00,000, you will have to provide your PAN card details at the time of purchase.
Making investments: Investing in securities is seen as a good way to build your wealth. If you are considering investing in securities, you would have to furnish your PAN details for any transactions amounting to above Rs.50,000. This extends to equities, mutual funds, bonds as well as debentures.
Proof of Identity: a PAN card is accepted as valid proof of identity anywhere in the country and, and is also considered as proof of age. It can also be used as proof of identity when making an application for a passport, voter ID, driving licence, electricity connection etc.
Foreign Exchange: If you are travelling abroad and wish to convert your Indian currency into foreign currency, you are required to provide details of your PAN at the money exchange bureau/bank/institution where you are converting the money.
Property: Buying, selling or renting a property in India now requires PAN card proof. In the case of buying property, the PAN details of the buyer as well as the seller have to be listed on the sales deed and any other such documentation for the sale to be complete.
Loans: If you require to take out a loan, all loan providers, both banks as well as other lending institutions, require you to submit details of your PAN at the time of loan application. All loans, from education loans to personal loans require PAN details for the loan to be approved.
Fixed Deposits: If you plan on investing your money in a Fixed Deposit (FD) amounting to above Rs.50,000 in a bank, you will have to provide your PAN details. This is done as the bank will deduct TDS (Tax Deductible at Source) on the FD interest amount.
Cash Deposits: If you are making a cash deposit that amounts to over Rs. 50, 000 at a time, you will have to submit your PAN details as well. This is in keeping with the RBI mandate, which directs banks to report any large cash deposits to the RBI, as a way to prevent money laundering.
Telephone Connections: If you wish to get a new telephone or mobile phone connection, it is mandatory to submit your PAN details, as private cellular operators will not provide you with a connection without it.
Insurance Payments: As per the Income Tax Department directives, PAN card details have to be furnished when making an insurance payment exceeding Rs.50,000 a year.
From the above, we see that a PAN card is required for a large number of activities, both financial as well as non-financial.