Nowadays there is plenty of use of Pan Card for financial use cases Like opening a Demat account Bank account or receiving money of more than 50 thousand rupees, etc. Pan Card is the most important document to avail banking services. Nowadays, We all need Pan Card for all Banking and Finance related services.
For example, if you want to open a bank account or a Demat account to start trading we all need to use the Pan Card. Similarly, Pan Card Number is considered to be an essential document for Property dealing and jewelry deals.
Similarly, The Pan Card is used in the case of Bank Loans, Credit Cards, visas, etc. In this article, we will learn the uses of Pan Card. Also, we will know who is eligible to make a pan card and the necessary documents required for creating a Pan card.
- 1 Who is eligible to make Pan Card?
- 2 Use of Pan Card in India
- 2.1 Use of pan Card as a valid document for Identity Proof
- 2.2 The Pan Card Number is required for filing ITR (Income Tax Return)
- 2.3 The Pan Card is necessary for opening a Bank Account
- 2.4 Deduction in Taxation
- 2.5 To open a Fixed Deposit (FD) or any other deposit account
- 2.6 The Pan Card is Required while applying for Credit Card or Bank Loan
- 2.7 The Pan Card is important to invest in the Share market
- 2.8 The Pan Card details are mandatory when getting high-cost insurance
- 2.9 A pan number is needed while buying or selling a car or heavy vehicle
- 2.10 PAN number has to be given even to buy expensive jewelry.
- 2.11 Buying Foreign Currency
- 2.12 PAN number required to buy or sell expensive property
- 2.13 The pan number is required to receive big prize money
Who is eligible to make Pan Card?
All the citizens of India are eligible to apply for the Pan Card. The Pan Card can also be made for children, senior citizens, and women. If anyone wants to make a normal Pan Card, then you don’t need to fulfill the eligibility criteria. But if you want to apply for an instant Pan Card with the help of an Aadhaar Card then your age must be 18 or above 18. For a detailed process go to this article: How to download e-Filing pan card
Use of Pan Card in India
In India Pan card is used by citizens for the following works:
Use of pan Card as a valid document for Identity Proof
When you are applying for an Aadhaar card, Voter ID, Driving License, Passport, Electricity connection, or any other government scheme, you will need to submit a valid Identity Proof while traveling by train or airplane. For all these, you can use Pan Card to authenticate your Identity.
The Pan Card Number is required for filing ITR (Income Tax Return)
Pan Card Number is the most important document while filling ITR (Income Tax Return). In the ITR form, you will be required to provide complete detail of your annual income and taxes paid by the financial year. All these details get registered in your income tax account which is your Pan Number.
It is mandatory for those who pay tax or Whose TDS is deducted to file ITR (Income Tax Return). And those people can also file ITR whose tax does not get deducted.
The Pan Card is necessary for opening a Bank Account
Pan Card is referred to as a very important document for any type of bank account opening except the basic zero balance bank account. Pan Card is important for both saving account and current account opening.
- Saving Account: In this type of account you can deposit money for future use. Bank gives you interest for this bank account type. But the maximum transaction that can be done in a month is limited in this account type.
- Current Account: This account type is related to business-related transactions. In this account type, there is no limit for transactions that can be done in a day. But the bank does not pay you interest for deposited money.
On Depositing more than 50 thousand rupees in the bank account then it is necessary to provide Pan Card details to the bank. Similarly, if you pay a hotel bill for more than 50 thousand, then it is necessary to provide Pan details.
Deduction in Taxation
Tax purposes are one of the primary motives for having a PAN card. If a person does not link their PAN to their bank account and has yearly interest profits on savings deposits of more than Rs. 10,000, the concerned bank would charge TDS at a rate of 30% rather than 10%.
To open a Fixed Deposit (FD) or any other deposit account
If you want to open a Fixed Deposit account for more than 50 thousand rupees then you have to provide your pan card details to the bank. If you receive interest of more than 40 thousand for your deposited money in the bank then 10% TDS will be deducted.
However, if your annual income including that interest is not so much that it becomes tax liability, then you can also stop the TDS deduction on your interest. For this, you have to submit Form 15G at the beginning of the financial year. People above 60 years of age have to submit Form 15H for this purpose.
The Pan Card is Required while applying for Credit Card or Bank Loan
If you are applying for a loan in any bank or financial institution then you have to mention your Pan number in your application form. It is important to mention Pan Card details while applying for Home Loan, Business Loan, Education Loan, or Personal Loan.
To prevent money laundering, the Reserve Bank of India (RBI) has made it mandatory for all the banks to report all the information about the user including Pan Card details while major transactions are done by them.
If you invest more than 50 thousand then it is mandatory to submit your Pan Card details. This restriction also applies to investments n mutual funds, bonds, and debentures.
You will need to create a Demat account to invest in the share market. And the SEBI (Securities and Exchange Board of India) has made some rules and regulations for creating a Demat account in these rules one is to submit your original Pan card while creating a Demat account.
If a group of people wants to create a Demat account then every member of the group will have to submit their original Pan Card. Then only their Demat account will open.
The Pan Card details are mandatory when getting high-cost insurance
If you buy an insurance policy in which you have to pay a premium amount of more than 50 thousand rupees then it is mandatory to submit your Pan Card details. In this case, you have to submit a copy of your Pan Card while buying the insurance.
This applies to all types of life insurance policies such as Term Insurance Plans, Unit Linked Insurance Plans (ULIPs), Retirement & Pension Plans, Unit Linked Child Plans & Health Plans, Endowment Plans, Money Back Plans, Whole Life Plans, etc. Condition applies.
A pan number is needed while buying or selling a car or heavy vehicle
When you buy a motor vehicle or car worth more than 5 lakhs then you will have to submit Pan Card details along with Identity proof, Address proof, and Income proof. Similarly, when you sell a high-cost vehicle then you will have to show your vehicle documents and KYC documents, and along with these documents you will also have to submit pan Card details.
PAN number has to be given even to buy expensive jewelry.
While buying jewelry worth more than 2 lakhs you will need to provide your Pan Card details. This restriction is applicable on every mode of payment whether the mode of payment is cash or you are paying the cost with your card. In the case of ornaments made of gold, silver, or precious gems and stones. Before 2016, it was mandatory to give PAN details on the purchase of jewelry worth more than Rs 5 lakh, which was increased to Rs 2 lakh from January 1, 2016.
Buying Foreign Currency
When traveling to another country for tourism purposes, business purposes, or any other purpose then you will need their currency to buy anything. For that you will have to exchange the Indian rupee with their currency at that time you will require your Pan Card details. The authorized money exchange bureau or bank will also ask for your PAN number to give you this facility. Just like that when you earn money in foreign currency or for your money order from another country then you will have to submit your PAN number.
PAN number required to buy or sell expensive property
Now in India, it has also become necessary to provide a Pan Card number To buy, sell or rent a property (plot or flat or house, shop, building, etc.) worth more than Rs 5 lakh. In the sales deed prepared in property-related deals, PAN card details of both the buyer and the seller of the property are required.
The pan number is required to receive big prize money
If you belong to the sports field and you participated in any national or international level competition then to receive prize money worth more than 1 lakh you have to provide your pan card details.
Similarly, TDS is also deducted from the prize money received by the winners of reality shows, quiz programs like KBC, etc. held by TV channels. Whose details get registered in your tax account? This means that there also you will need to give PAN number details.
So, friends, this was the information regarding the need and use of PAN cards. For other useful information related to Banking services, account opening, and closing, see our articles-
- How to link Pan Card with a Bank account in 2023?
- How to close your bank account in 2023
- How to Open an Account Online From Mobile in 2023?
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