PAN stands for Permanent Account Number. The PAN card is a document which can be used as an identification card whenever required. It contains a 10- character alpha-numeric identifier. The sole authority which can allot these numbers if the Income Tax Department.
The benefits of having a PAN card are innumerable. Apart from having benefits this document is a must if an individual wishes to file income tax returns. Under the Indian Income Tax Act, 1961, the Government of India makes it mandatory to have this document for all tax payers. This is what a PAN card looks like
It was necessary that the Government made one document which would allow the Government to keep track of the tax paid by those who were eligible. tax evasion is a major issue faced by our country. Through the PAN card the Government can track all financial transactions made by a person.
What makes the PAN card different from most other Government Identification document is that this card is issued to foreign nationals as well. This can be issued only if they wish to invest in the country. The person must be having a valid visa before this document can be issued.
Constituents of a PAN number
- The 10 digit number which is a unique code is the main constituent of the PAN Card. The code involves a mix of numbers and alphabets. The first four characters of the PAN are alphabets, the next five are numbers. The last character is again an alphabet.
- The fourth alphabet is not a random alphabet allotted. It has a definite meaning. It shows the status of the owner of the PAN card. The different alphabets can be used for Individual, Association of Persons, Body of Individuals, Firm and five other categories.
- The PAN card also contains the full name and signature of the PAN card owner, if applied by an individual. The PAN card can be applied not only by individuals but also by different categories are shown below in the image.
- The date of birth
- Father’s name in the case of individuals
Even if the address of an individual or entity changes, the code given to that person will still remain the same. This is what makes the PAN card so unique.
Benefits of having a PAN Card
The PAN card does not have any age eligibility. So even a baby just born can have a PAN card , though this is not a document which is usually made for a new born. This has been a successful endeavor by the Government and this has been possible only because this is a document required at many places.
Read Here – Pan card Application Form
For certain transactions like those which involve sale or purchase of an estate or land whose value is more than five lakh or more a PAN card is an absolute must. The PAN card will also be asked for in the case that an individual books an airline ticket which is exceeding fifty thousand rupees. Through the PAN card the Income Tax Department can keep a full record of all monetary or financial transactions for tax purposes.
The detailed advantages of having a PAN card are given below:
- When you wish to open a bank account- To open a new bank account the person will have to quote his Permanent Account Number. This was done so the Government can control the rising problem of black money. The only exception was made in the case of accounts opened through Pradhan Mantri Jan Dhan Yojana.
- When you are purchasing or selling a vehicle- Even when you buy or sell any automobile vehicle a PAN card is needed.
- In the case of mutual funds and shares- To buy mutual funds or when you buy shares worth more than fifty thousand the required authority will ask for a PAN Card.
- Even when you get employed- If you get a job then your employer will ask for your PAN Card details. The employer asks for a PAN card because he will need it to deduct taxes from your salary . In most organizations the employee receives his salary after the direct taxes are deducted. This is done through the PAN card.
- Telephone connection- This just shows how important the Government considers the PAN card. Even when a person wishes to buy a new telephone connection the Government authority will ask for your PAN card. There are other requirements also but PAN card is one of the most important one.
- There are a number of other places where the PAN card is mandatory like for exchange of foreign currency, when making cash deposits above a certain amount, or even when taking a loan from a bank.
The Government has made it easy for anyone who wishes to get a PAN card to apply and obtain one. There is a Form 49 through which you can get a new PAN card or make changes or get a duplicate if required.