Check here if PAN Card is Mandatory for You or Not
Permanent Account Number (PAN) is an alphanumeric identity of 10-digit assigned to every Indian, even minors. The allotment of the number is done by the Income Tax department directly under the supervision of the Central Board of Direct Taxes.
The use of PAN card is multifarious - apart from serving as an identity proof, it is also essential for various financial transactions like purchase or sale of an asset, receiving a professional fee or taxable salary, and investing in mutual funds among others.
Who has to apply for a PAN card?
Any individual earning more than Rs.2,50,000 in India, and also foreign nationals paying taxes here as well, require PAN card mandatorily. Additionally, business entities will have to obtain a Permanent Account Number if the turnover, total sales, or gross receipts exceed Rs.5 lakh in a particular financial year.
The importance of PAN card for a company is immense as every transaction made by the entity will have to go through the Permanent Account Number. It helps in the identification of the tax flow of the company.
When is PAN card mandatory?
The Income Tax Department uses the Permanent Account Number to track financial transactions like payment of tax, TCS/TDS credit, specified transactions, and returns of income, among others. Among many benefits of PAN card, it enables in the facilitation of retrieving specific information which can be linked with borrowings, investments, and other business activities.
Below mentioned are a few situations where PAN card is mandatory –
- To file income tax returns.
- For individual financial transactions worth Rs.2.5 lakh or more.
- Purchase or sale of immovable property valued at less than Rs.5 lakh.
- For cash deposits above Rs.50,000.
- To pay an insurance premium of Rs.50,000 or above.
It should be noted here that Rule 114B of the Income Tax Act, 1961 mentions that state governments, central government, and consular offices do not have to mention permanent account numbers.
The significance of Permanent Account Number is evident; and, if the card is misplaced, individuals should opt for a reprint of PAN card. This can be done from the official website of the NSDL.
However, it should be noted that individuals have to pay a certain fee to apply for duplicate PAN card online. Hence, they can apply for an insurance policy that provides financial coverage against such expenses when their PAN card is lost.
Reputed financial institution, Bajaj Finserv provides the Wallet Care insurance plan under its Pocket Insurance & Subscriptions. Among the host of benefits of the plan, it also offers blocking facility for multiple cards via a single call.
Additionally, in the event that an individual’s handbag is misplaced, a handbag assure insurance policy will offer a high coverage and compensation for PAN card replacement.
A purse may also contain a number of valuables like debit card, credit card and PAN card, which may be subject to misuse in case of loss or theft. In such cases, a purse care insurance policy would not only ensure customers receive reimbursement for lost PAN card replacement but also block all their credit and debit cards with a single call.
To conclude, while it is not mandatory to quote the Permanent Account Number in all transactions, it is advisable for an individual to apply for it nonetheless. Also, when lost, card holders must file an FIR with their respective police station.