PAN stands for Permanent Account Number, which is a vital financial document in India. It is majorly used while filing the Income Tax Returns (ITR) by individuals who are earning Salary and by businesses. Other than this, the PAN Card is also a proof of identity in India.
But other than only being helpful while filing ITR and being a proof of identity, a PAN Card is mandatory to be quoted in many instances. If you wish to know areas where PAN Card is needed, then this post will help you. Read on!
Is having a PAN Card Mandatory?
The basic purpose of the PAN Card is to provide universal identification to all financial transactions and keep off tax evasion by tracking financial transactions. Unlike Driving License and Aadhaar Card, a PAN Card is also issued to foreign nationals. Yes, people looking to invest or do business in India can apply for PAN Card online. Thus, a PAN Card is not accepted as proof of Indian citizenship.
Also, Read This: What Are Different Types of Bank Accounts in India
Hence, having a PAN Card is not mandatory and only voluntary and optional just like Passport, Aadhaar Card and Driving License. Nonetheless, the use of a PAN Card is mandatory at some places such as Passport for foreigners and Driving Licenses for driving. Just like people who are needed to furnish Income Tax returns or who are willing to enter into a financial transaction, the quoting of PAN Card becomes a must.
Areas Where PAN Card is Mandatory
- Purchase or sale of a vehicle or any vehicle that is other than 2 wheelers
- ITR filing – All individuals and business entities who are eligible to pay income tax as per their income tax slabs are needed to quote PAN details for ITR.
- Opening of a bank account with a bank or a co-operative bank in India
- While applying for the issue of a credit or a debit card in India. Unless you don’t submit your PAN details, your service provider won’t consider your application
- When you wish to open a Demat account with a depository, securities’ custodian, participant or any other individual with SEBI
- When you make a payment in cash in excess of Rs.50,000 to a restaurant or a hotel while paying a bill at any time
- While making payment exceeding Rs.50,000 related to travel to any foreign nation
- Payment for the buying of foreign currency at a time
- When you make a payment of Rs.50,000 and above for purchasing the units of a Mutual Fund
- When you have to make a payment above Rs.50,000 to an institution or a company for obtaining bonds or debentures issued by it
- Payment of Rs.50,000 and more to Reserve Bank of India (RBI) for buying bonds issued at its end
- When you deposit cash that’s Rs.50,000 or exceeding during a day for bank draft purchase or cheques of banker’s or pay orders from a bank or a co-operative bank
- When you have to make a time deposit of an amount in excess of Rs.50,000 or collectively more than Rs.5 lakh during a financial year with a bank, NBFC and Post Office
- Payment of an amount over Rs.50,000 towards paying life insurance premium in a financial year to an insurer
- When you want to buy jewelry in India whose price value is Rs.5 lakh, then it becomes a must to quote a PAN Card details
- As discussed earlier, PAN Card is also a valid proof of identity all across the country and is also taken as proof of age. You can quote your PAN details as a proof of identity while applying for a Passport, Voter ID Card, Driving License and Electricity Connection and more
- If you are going out of the country and wanted to convert your Indian rupees into the currency of the country of your travel, then you will need to quote PAN details
- If you are looking to take out a loan, all loan providers from banks to NBFCs will need you to submit your PAN details to process your application
You are now aware of the areas where the PAN Card is mandatory. If you were looking to apply for a PAN Card, then you can do that online on the NSDL website hassle-free. You can also update your PAN Card from NSDL website.