PAN CARD

PAN CARD

Why PAN card is required ?

A PAN (Permanent Account Number) card is a vital document for several financial and tax-related activities in India. Here are some key reasons why it is required:

  1. Income Tax Filing: PAN is mandatory for filing income tax returns in India. It helps the Income Tax Department track financial transactions and ensures that taxpayers meet their obligations.
  2. Tax Deduction and Collection: PAN is needed for tax deduction at source (TDS) and for tax collection at source (TCS). It’s essential for both individuals and businesses to ensure correct tax compliance.
  3. Financial Transactions: For large financial transactions such as opening a bank account, applying for a credit card, or making investments (e.g., buying property, shares, or mutual funds), PAN is often required.
  4. Proof of Identity: PAN card serves as a valid proof of identity. It is widely accepted as a government-issued ID for various purposes.
  5. Business Transactions: Businesses use PAN for various purposes including filing GST returns, applying for loans, and conducting other financial transactions.
  6. Avoiding Penalties: PAN helps in avoiding penalties and legal issues related to tax evasion or non-compliance.

Overall, the PAN card plays a crucial role in the Indian financial system by ensuring transparency, reducing tax evasion, and facilitating financial transactions.icant financial activities.

What happens after pan card ?

After you receive your PAN (Permanent Account Number) card, it becomes an important tool for your financial and legal activities. Here’s what happens and how it can be used:

1. Income Tax Filings:

  • You can file income tax returns (ITR) using your PAN. This becomes mandatory if your income exceeds a certain threshold, and the PAN helps track your tax liabilities and payments.

2. Access to Banking Services:

  • Open Bank Accounts: A PAN is necessary to open a savings or current bank account.
  • Apply for Loans or Credit Cards: Banks will ask for your PAN as part of the Know Your Customer (KYC) process.
  • Deposits and Withdrawals: You need to provide your PAN for cash deposits or withdrawals above ₹50,000.

3. Investments and Financial Products:

  • You can use your PAN to invest in mutual funds, stocks, bonds, and other financial products.
  • A PAN is essential to open a Demat account, which is required for trading in the stock market.

4. Large Financial Transactions:

  • Your PAN will be required for purchasing or selling real estate, vehicles, or jewelry above certain limits.
  • PAN is also needed for large payments (₹50,000 or more) in hotels, travel agencies, and foreign exchange.

5. Government Benefits and Subsidies:

  • The government may use your PAN to verify eligibility for certain subsidies, welfare schemes, or direct benefit transfers.

6. Linking with Aadhaar:

  • You may need to link your PAN with your Aadhaar card for tax purposes. This helps streamline your identification across various government services.

In short, after getting a PAN card, you become part of the formal financial and tax system, with your PAN acting as a key identifier for al your significant financial activities.

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