PAN ( Permanent Account Number) is a very vital document for all individuals and entities in India. It is 10-digits alpha-numeric number that is given to each Indian citizen by the Income Tax Department. Nowadays, it not only does use for tracking PAN cardholder but also helps in many day-to-day transactions. PAN has become mandatory for bank account and investment platforms such as mutual funds, Grow and much more. It is compulsory to have a PAN whether you are attempted financial transactions like professional fee and sale or purchase of assets, receiving a salary, and similar factors. PAN card is needed in case of if your salary does not fall within the taxable brackets. Having a PAN card is mandatory for companies if their turnover or gross receipt surpass five lacs in the past financial year. In this blog post, we will look a lot of Benefit Of Pan Card one by one.
Benefit Of Pan Card
It is a folk story, that PAN is required only for the individuals who gross taxable salary. A PAN comes with different advantages and uses. There are several benefits of having a PAN card for a company and an individual. Take a glimpse at the benefit of PAN Card!!
1. For Income Tax Returns –
A PAN Card is essential for numerous tax-associated routine practices like Lessen Tax Deduction at Source (TDS), Claiming Income Tax refunds and Filing Income Tax Returns.
- Filing ITR: For any individual, entity and native Indian or an NRI, a PAN card is needed to be referenced at the time of filing income tax returns.
- Reduce TDS: Referencing a PAN Card at diverse places can help decrease the TDS rate. For example, banks will deduct TDS of 30% on the interest-earned above 10k in a savings account instead of 10% if PAN is not provided.
- Requesting Tax Refunds: If the tax liability is more than effectively paid as TDS, the cardholder can declare refunds. But, the bank account where you want Tax refund must be linked to your PAN.
2. Unveiling Account –
PAN Card is a vital document that has required when it comes to opening diverse accounts such as Demat Accounts, NRO Accounts and Bank Accounts.
- NRO Accounts: NRIs need to provide pan card details if you want to disclose rupee-denominated NRO accounts for keeping their salary earned from India. But, for FCNR accounts, Form-60 and NRE accounts can be given as a proxy to PAN.
- Demat Accounts: PAN card is also mandatory for a person to open a Demat Account, which is required to keep the financial securities such as banknotes, bonds, shares, or ETFs.
- Bank Accounts: An individual and entity can only disclose a zero balance account by using voter id card, aadhaar card, ration card and other identity proof under the Pradhan Mantri Jan Dhan Yojana.
3. Beginning a Business –
According to the 1961 Income Tax Act, PAN card for any new organization was commanded by the Indian Government which was later executed totally in 2010. In order to begin a business, startup and a company mandatory need to have a pan card to register their business. Pan card helps to get a unique TRN (Tax Registration Number) for companies.
4. Buying Foreign Currency –
Under the Foreign Exchange Management Act – if you wish to buy any kinds of foreign currency above Rs. 50,000/-, PAN Card is compulsory for you. It helps to start under capital or current account transactions easily.
5. Purchasing Air Tickets And Foreign Travel –
If your air ticket exceeds Rs. 50,000 then for paying the air ticket gross expenses you will need a PAN card. If you are traveling in a foreign county, you will need to buy Forex. And Forex purchase needs PAN card.
6. Paying Restaurant & Hotel Bills –
If your Restaurant & Hotel Bills surpass Rs. 50k, for clearing the bill you will require a PAN card.
7. Depositing Cash in Bank Account –
When a PAN is compulsory if you have to open a new bank account, you will also need to reveal your PAN Card, as well as if your cash exceeds 50,000/- limit that you want to deposit in your account.
8. For Demand Drafts and Banker Cheque –
If you want to build demand drafts and banker’s cheques above 50,000/- limit, having a pan card is mandatory.
9. Buying mutual funds, bonds/ debentures and insurance –
A PAN card is a very crucial document for purchasing investment & insurance plans. It helps people to fulfill the KYC process who want to purchase bonds, mutual funds and debentures. Pan card considers the best KYC document that helps to make an investment in mutual funds successfully. Investing Rs. 50,000/- in bonds and mutual funds also mandates a pan card.
10. Decrease misuse opportunities –
The possibility of PAN card misuse is minimal. The chance of PAN card misuse is negligible. Mostly, a PAN card won’t change regardless of whether it is stolen and lost.
11. Buying and selling new four wheeler vehicles –
A PAN card is a compulsory document that helps to buy and sell new four-wheeler vehicles. If you buy a new car and apply to take a loan then having a PAN card is mandatory. But, a PAN card is not essential if you are purchasing a second-hand car. Instead of a PAN you an use a Form-60 to buy a second-hand car.
12. Purchase & Sale Of An Immovable Property And Goods & Services –
You will need to furnish your PAN card details if you are buying and selling a house and goods & services which have worth more than Rs. 10 lakhs.
13. Time Deposit –
A PAN card is a necessary document that helps deposit cash 5 lakh or above every year with post-offices, non-banking financial companies and co-operative banks.
14. Foreign Transactions –
Regardless of the amount of transaction, you need to provide PAN details for diverse foreign exchanges, including- transferring money from NRE to NRO Account and paying money out of India.
15. Documentary Proof of Identity –
PAN card reveals a valid identity proof that is accepted by all financial firms and other companies as a legal and ethical identity proof. But, other identity proofs such as ratio card, aadhar card and voter id card is also accepted by financial institutions.
In this blog post we have revealed a various type of PAN Card benefits that you need to know. Besides all the pan card and its uses, linking PAN with the Aadhaar card also brings some additional advantages.