What is PAN card?
Permanent Account Number (PAN) is unique alphanumeric combination issued to all juristic entities identifiable under the Indian Income Tax Act 1961. Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department. It is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and it also serves as an important ID proof.
Obtaining or possessing more than one PAN is against the law. A facility for verifying PAN is available on the website of the Income Tax department, so that the employer can check the employ’s true identity and verify the candidate’s identity.
Why Is It Necessary To Have PAN?
It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. From 1 January 2005 it will be mandatory to quote PAN on challans for any payments due to Income Tax Department. So in simple words If a pe₹on’s income exceeds the basic exemption limit, then they should apply for a PAN card by May 31st of the relevant assessment year. Any pe₹on whose turnover exceeds ₹ 50, 000 should apply for a PAN card before the end of that accounting year, so the Income Tax Department could maintain their tax record.
All eligible candidates are also required to quote PAN in all documents pertaining to financial transactions notified from time-to-time by the Central Board of Direct Taxes. The entire database will be maintained by the Income Tax Department. Some such transactions are sale and purchase of immovable property or motor vehicle or payments in cash, of amounts exceeding ₹ 25,000/-to hotels and restaurants or in connection with travel to any foreign country. It is also mandatory to mention PAN for obtaining a telephone or cellular telephone connection. Likewise, PAN has to be mentioned for making a time deposit exceeding ₹ 50,000/- with a Bank or Post Office or depositing cash of ₹ 50,000/- or more in a Bank.