Permanent Account Number is provided by the Indian Income Tax department and is used as an ID proof. Pan Card number consists of characters, letters and numerals combined together to form a structure like AAAAA9999A. First five characters of the PAN Card number or letters followed by numerals and one character at the end. The fourth letter ensures about the holder type which can be any of the following given below.
C — Company
P — Person
H — HUF (Hindu Undivided Family)
F — Firm
A — Association of Persons (AOP)
T — AOP (Trust)
B — Body of Individuals (BOI)
L — Local Authority
J — Artificial Juridical Person
G — Government
Date of Birth is also mentioned on the card along with the photo which makes it a complete identity proof.
Central Board of Direct Taxes (CBDT) handles the entire process of issuing Pan Cards to the Indian residents. It can be used for a number of purposes like opening the bank account, sale/purchase of assets and for taxable salary. Pan Card is characterized by three features; nationality, uniqueness and permanency. Even if the address is changed, there is no effect on the card and is valid in any state you.
What is the Purpose of Having a PAN Card?
The basic purpose of having a PAN card is to provide a universal identification to all the citizens of the country and facilitate a variety of financial transactions too. In this way it will become easy for you to maintain as well as conduct any transaction safely and without any problem. Keeping in mind the excellent benefits, it is important that one should have a PAN Card.
Why Pan Card is Necessary?
While filing the return, it is essential to provide the PAN card number and this has been made stricter since January 1, 2005. Apart from the income tax there are various other places where you will have to mention the number including:-
- Cash payment if planning a foreign trip value exceeding twenty five thousand rupees.
- Telephone connection
- Sale/purchase of vehicles
- Contract value exceeding one lakh rupees.
- Payment in hotels or restaurants for amount more than twenty five thousand rupees.
- Pay orders and banker’s check.
Thus the number has to be quoted in all of the above transactions and that is why pan card is necessary.
Importance of PAN Card
PAN card is important as it serves as an identity proof for the person and is required while making a transaction above a particular limit. Importance of PAN card is derived from the fact that it becomes easy to keep a check on the monetary conditions. Recently the government has started an exclusive online service related to Pan Card called as “Know Your PAN” through which you can get updated status of the card and collects other useful information. Verification as well as validation can be done through the website itself so that the process becomes fast and smooth.
So this is all about the PAN Card, its necessity, importance and how you can apply for the same.