PAN cards are required for the identification of documents. However, their inability to serve as address evidence is a concern. However, it is the most important number that connects and tracks several records and details regarding taxes and financial transactions, including loans, investments, buying and selling real estate, and other commercial operations of taxpayers.
What is a PAN Card?
Like an Aadhar card or a Voter IT Card, a PAN card is a critical document needed to finish any significant activity. Although you probably already know what a PAN card is and how to use one, there are still a few points you should be aware of.
Read on to find out more about PAN cards, including what they are, seven benefits you should know about PAN cards, who is eligible to apply for one, and the Pan Card registration process.
7 Benefits to Know about Pan Card
ITRs, or income tax returns
A PAN card is useful for a number of tax-related procedures, including;
Filing ITR:
A PAN must be provided when filing income tax returns for any individual, whether they are a resident Indian or an NRI.
Tax Deduction at Source (TDS) Reduction:
Quoting a PAN card can lower the TDS rate at a number of locations. For instance, if a PAN is not provided, banks will instead take TDS of 30% on interest generated beyond Rs 10,000 in a savings account instead of 10%.
Taxpayers may request tax refunds if their tax burden exceeds the amount paid in TDS. However, connecting your PAN to the bank account where you intend to receive the reimbursement is necessary.
Opening Accounts:
A PAN is necessary as a piece of paperwork when opening various accounts.
Bank accounts:
A PAN card must be provided for all bank accounts, excluding savings account programs, under the Pradhan Mantri Jan Dhan Yojana.
Demat Accounts:
If you want to hold financial securities like shares, bonds, or ETFs, you should have a Demat account. An essential criterion for opening one of these is a PAN card.
NRO Accounts:
NRIs who seek to open rupee-denominated NRO accounts to hold their money obtained from India must provide PAN card information. However, you can use Form-60 in place of PAN for NRE or FCNR accounts.
Purchasing or Selling:
Whether you are purchasing or selling, you must provide PAN information for any goods or services with invoice amounts over Rs. 2 lakhs, Rs. 10 lakhs for movable property, and Rs. 15 lakhs for assets.
every vehicle, excluding two-wheelers
Securities above Rs 1 lakh and Rs 5 lakh for gold and precious metals.
Transactions Over Rs 50,000:
Certain transactions over Rs 50,000 in value, either once or throughout a financial year, require PAN information from the parties involved.
Cash Deposits into Bank Accounts:
If you are depositing cash into your or another person's bank account, and the deposit is more than Rs 50,000, you must provide PAN information.
Demand Drafts and Banker's Cheques:
PAN information is required for issuing bank draughts, pay orders, or banker's checks worth more than Rs 50,000.
Hotels and Restaurant Bills:
When paying cash for hotel and restaurant bills that total more than Rs 50,000, you must provide your PAN information.
Cash Payments Related to Travel:
- The traveller must provide PAN information for cash payments related to travel that exceed Rs 50,000 for a single trip.
- Purchasing Flights
- Making any travel-related expenditures
- Purchasing currency abroad
- Amount Paid to Travel Agency
Life Insurance Premiums in a Financial Year:
The PAN information of the insured is required if the life insurance premiums in a year exceed Rs 50,000.
Payments to Prepaid Instruments in a Financial Year:
You will need to provide your PAN information if you make payments to e-wallets, gift cards, or prepaid cash cards that total more than Rs 50,000 in a calendar year.
Purchasing Mutual Funds, Debentures, and Bonds:
To purchase mutual funds, debentures, or bonds of more than ₹50,000 in a calendar year, you must provide your PAN information.
Business registration:
When registering a business, you must obtain a unique Tax Registration Number (TRN), which you will get if you provide PAN information for both your company and the legal owners.
Foreign Transactions: Regardless of the transaction's amount, you must provide PAN information for various international transactions, including sending money outside of India.
Money Transfer from NRE Account to NRO Account
Documentary Proof of Identity:
It can be used as legitimate identity proof, in addition to being necessary for several transactions and keeping track of your tax liability.
Who is Eligible for a PAN Card?
Indian citizens who fit into the following categories can apply for a PAN card, per the Income Tax Act:
- Self-employed business people or professionals with yearly revenue of at least Rs. 5 lakh
- People who are required to pay tax or already do so
- People who engage in import and export business
- Registered groups, companies, and trusts
- A PAN card can also be obtained by NRIs (Non-Resident Indians), PIOs (Persons of Indian Origin), OCIs (Overseas Citizens of India), cardholders, and foreigners who come under the range of the Income Tax Act of 1961. Additionally, parents may apply for a PAN card on their underage children's behalf.
How do I obtain a PAN Card?
- A PAN card can be applied in both online and offline modes. For instructions on how to apply for a PAN card registration, see below:
- PAN Card Online Registration Application
- Find the PAN application form on the NSDL or UTIITSL official web portal and carefully fill it out.
- Submit two passport-sized photos and all necessary paperwork.
- Pay the required fee.
- Within 15 days, your PAN card will be sent to your registered address or, if that happens to be later, the applicant's communication address.
- PAN Card Offline Registration Application
- Observe the PAN facility.
- Provide accurate information on the PAN application form, together with two passport-size photos.
- Apply along with all necessary supporting documentation and processing costs.
- After submission, your PAN card will be provided within 15 days.
If you need any help regarding PAN card registration, you may contact Lawgical India anytime!
