Just last week when I went to the bank to deposit some cash, I heard a big commotion at one of the counters. When I went near I found a woman nearly in her fifties arguing with the bank officials. The argument pertained to the bank denying to accept any cash deposit from the lady as she did not quote the PAN on the deposit slip for an amount exceeding 50000 Rs but she kept on arguing that she was not required to obtain PAN so the quoting of PAN did not apply in her case. Sadly this is case everywhere and with everyone who is not aware about the basic requirements of our financial system.
So let us understand what is PAN?
PAN Stands for Permanent account no which is the Tax identification no. of an assessee issued by the Department of income tax.
PAN is prerequisite for filing income tax returns or in other words everyone including individual/non individual (including the foreign citizens/entities) earning taxable income in India must have a PAN card.
Who else is required to obtain PAN?
Besides, the above mentioned list of individuals who are required to obtain PAN,quoting of PAN is mandatory in the following cases:
- To open a new bank account and depository account
- To apply for credit card and bank loans
- For sale or purchase of immovable property with Rs. 5 lakh and more valuation
- Cash payment to a hotel or restaurant against a bill or bills at any one time in excess of Rs.50000
- Depositing into bank account an amount of Rs.50000 and more
- For sale or purchase of a car or any other vehicle (apart from two wheeler)
- Payment of an amount Rs. 50000 and more towards investment purpose
- Payment of life insurance premium in excess of Rs 50000
- Contract for sale or purchase of securities(other than shares) in excess of Rs 100000 per transaction
- Sale or purchase of any immovable property whose actual value or value determined by stamp valuation authority exceeds 10 lakhs
- Sale or purchase of securities /unlisted shares in excess of Rs 1 lakh per transaction
- Cash payment in connection with foreign travel in excess of Rs 50000
- Sale and purchase by any person of goods or services of any nature other than covered above for an amount exceeding Rs 2 lakh per transaction.
In addition to the above wef from 5th Dec 2018, the following are also required to obtain PAN:
In the case of a person, being a resident, other than an individual, which enters into a financial transaction of an amount aggregating to two lakh fifty thousand rupees or more in a financial year and which has not been allotted any Permanent account number, on or before the 31st day of May immediately following such financial year,” says the new rule.
This rule is also applicable to individuals like the managing director, director, partner, trustee, author, founder, karta, chief executive officer or office-bearer of all such entities
Are Minors eligible to obtain PAN?
Yes Minors are eligible to obtain PAN,However a minor cannot directly apply for PAN card. Parents, guardians or a representative assessee has to apply on the behalf of the minor. Further, it will be the signature of the guardian or father that will appear on the PAN card. Once a minor turns 18 years, you can update the PAN with the child’s photograph and signature.
Is it mandatory to mention fathers name on PAN application form?
Wef 5th Dec 2018,an applicant will have a choice as to whose name they want printed on the PAN card,so far it was mandatory to mention the name of the father as the same was also printed in the PAN card.
The IT department has made an exception for applicant whose mother is a single parent or where the father is either dead or estranged.
Is it mandatory to link Aadhaar Card with PAN?
As per the judgement of Honorable supreme court,it is now mandatory to link PAN with Aadhaar Card.The deadline for such linking has been set at 31st march 2019.
Written & Edited by:
Shivangi Bathwal
dailydelights 