Before we find out the purpose of a PAN card, let us first understand what a PAN card really is. PAN refers to Permanent Account Number that identifies all the tax payers in the country. Every PAN card holder has a 10-digit unique alphanumeric identification number on the card, which is provided to all Indians. This is a computer-based identification system, which is responsible for providing us with this unique identification number.
PAN card stores all the tax-related information about a person. No two people can have the same PAN card. The main purpose of a PAN card is to avoid the dodging of tax payment. Once this card is made, it will permanently remain with you and will not be affected by any changes. The easiest way to apply PAN card is through an online portal.
Purpose of PAN Card
A PAN card serves various purposes like:
Currency Exchange
Though you have your visa and passport, without a PAN card, no foreign currency exchanges cannot be made. Before you make any foreign exchange, PAN card is mandatory.
Shares and Trading
You cannot step into trade sharing if you don’t own a PAN card. It’s a must to provide your PAN details to your trading account provider to sell or buy shares from BSE and NSE, the Indian Stock Exchanges.
Vehicle Purchase
For purchasing any vehicle, which costs above one Lakh, it is mandatory to submit a PAN card. It is also required when you are selling a vehicle.
Debit/ Credit Cards
All the banks ask to submit your PAN card before they provide you with a debit or a credit card. If the PAN card is not submitted, the application is most likely to be rejected.
Cell Phone Connection
The Government of India has made it compulsory for each applicant to submit PAN card details before receiving a cellular connection to track the extortion charges and more.
Job
Every employee has to submit PAN card details to the company for tax-related purposes. On payday, the taxes of the employee are first deducted by the bank and then the salary is added to their bank accounts. Company outgoings are also recorded through the PAN cards details.
Property
A PAN card is mandatory for any property-related purchases or property sales above five lakhs. When it comes to renting a house, the landlords usually collect the details of the tenant’s PAN card.
Financial Transactions by NRIs
If an NRI wants to make any financial transactions in India, he must possess a PAN card. This may include his investments, banking or real estate transactions.
Jewellery
While making a purchase of any sort of jewellery above five lakhs, you should submit your PAN card at the place of purchase.
The introduction of PAN card has restricted gambling in the financial sector and has avoided a lot of frauds in the financial sector. If a person or an entity is entitled for tax refunds, having a PAN card is highly essential. Practically, most of the monetary transactions will demand a PAN card. The importance of PAN card can never be questioned as it is a basic document for any lawful transaction. So, if you don’t have one, apply PAN card immediately to enjoy its benefits.