IS IT MANDATORY TO HAVE PAN NUMBER FOR THE INDIAN CITIZENS?
SPECIFIED TRANSACTIONS WHERE PAN IS NEEDS TO BE QUOTED
Permanent Account Number, a unique 10 character alpha-numeric identification, today, acts as a proof of identification. But is it mandatory for every Indian citizen? What are the transactions where the PAN needs to be quoted? Let us explore more about PAN.
IS PAN MANDATORY?
Primary purpose of the PAN is to bring a universal identification to all financial transactions and to prevent tax evasion by keeping track of monetary transactions. Unlike the Aadhar and Driving License, it is also issued to foreign nationals who want to do business or invest in India. Hence, it is not acceptable as proof of Indian citizenship.
Therefore, PAN is optional and voluntary just like passport, Driving License, Aadhar card etc. However, its use is mandatory at required places like Driving License for driving and passport for foreign travels. Similarly, persons who are required to furnish income tax return or who intend to enter into economic or financial transaction for which it is mandatory, must obtain PAN.
Minor can also apply for PAN Card and it depth also allows Pan Card to minor without any hassles but due to clubbing provision income of minor is clubbed with Parents / Guardian.
TRANSACTIONS WHERE PAN IS MANDATORY
Following are the transactions in which quoting of PAN is mandatory by every person except the Central Government, the State Governments and the Consular Offices:
- Sale or purchase of a motor vehicle or vehicle other than two wheeled vehicles.
- Opening an account [other than a time-deposit referred at point No. 12 and a Basic Savings Bank Deposit Account] with a banking company or a co-operative bank.
- Making an application for issue of a credit or debit card.
- Opening of a demat account with a depository, participant, custodian of securities or any other person with SEBI.
- Payment in cash of an amount exceeding Rs. 50,000 to a hotel or restaurant against bill at any one time.
- Payment in cash of an amount exceeding Rs. 50,000 in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time.
- Payment of an amount exceeding Rs. 50,000 to a Mutual Fund for purchase of its units.
- Payment of an amount exceeding Rs. 50,000 to a company or an institution for acquiring debentures or bonds issued by it.
- Payment of an amount exceeding Rs. 50,000 to the Reserve Bank of India for acquiring bonds issued by it.
- Deposits of cash exceeding Rs. 50,000 during any one day with a banking company or a cooperative bank.
- Payment in cash for an amount exceeding Rs. 50,000 during any one day for purchase of bank drafts or pay orders or banker’s cheques from a banking company or a co-operative bank.
- A time deposit of amount exceeding Rs. 50,000 or aggregating to more than Rs. 5 lakh during a financial year with –
(i) a banking company or a co-operative bank
(ii) a Post Office;
(iii) a Nidhi referred to in section 406 of the Companies Act, 2013 or
(iv) a non-banking financial company
- Payment in cash or by way of a bank draft/ pay order/ banker’s cheque of an amount aggregating to more than Rs. 50,000 in a financial year for one or more pre-paid payment instruments, as defined in the policy guidelines for issuance and operation of pre-paid payment instruments issued by Reserve Bank of India to a banking company or a co-operative bank or to any other institution.
- Payment of an amount aggregating to more than Rs. 50,000 in a financial year life insurance premium to an insurer.
- A contract for sale or purchase of securities (other than shares) for amount exceeding Rs. 1 lakh per transaction.
- Sale or purchase of shares of a company not listed in a recognized stock exchange for amount exceeding Rs. 1 lakh per transaction.
- Sale or purchase of any immovable property for an amount exceeding Rs. 10 lakh or valued by stamp valuation authority at an amount exceeding ten lakh rupees.
- Sale or purchase of goods or services of any nature other than those specified above for an amount exceeding Rs. 2 lakh per transaction.
Entering into any such transaction and don’t have a PAN? Don’t worry, you can make a declaration in Form No. 60 or get a PAN soon !