What is pan card ? why should we use this? Why Is It Necessary To Have PAN? Who must have a PAN?
What Is PAN?
Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department.
A typical PAN is AABPS1205E.
Why Is It Necessary To Have PAN?
It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. From 1 January 2005 it will be mandatory to quote PAN on challans for any payments due to Income Tax Department.
{Section 139A (5) (a) and (b)}
It is also compulsory to quote PAN in all documents pertaining to financial transactions notified from time-to-time by the Central Board of Direct Taxes. Some such transactions are sale and purchase of immovable property or motor vehicle or payments in cash, of amounts exceeding Rs. 25,000/-to hotels and restaurants or in connection with travel to any foreign country. It is also mandatory to mention PAN for obtaining a telephone or cellular telephone connection. Likewise, PAN has to be mentioned for making a time deposit exceeding Rs. 50,000/- with a Bank or Post Office or depositing cash of Rs. 50,000/- or more in a Bank.
{Section 139A (5) (c) read with Rule 114B}
Who must have a PAN?
- All existing assesses or taxpayers or persons who are required to furnish a return of income, even on behalf of others, must obtain PAN.
{Section 139A (1) and (1A)} - Any person, who intends to enter into financial transaction where quoting PAN is mandatory, must also obtain PAN.
{ Section 139A (5) (c) read with Rule 114B} - The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.
{Section 139A (2) and (3)}
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