You might have come across the term PAN card while initiating any kind of financial transaction or while opening any bank account. It is actually an alpha-numeric number with ten digits that is issued to every taxpayer by IT Department or Income Tax Department. Having a PAN becomes mandatory for individuals who have been undertaking any kind of financial transactions such as professional fee, receiving salary, purchase or sale of assets, and similar elements. Even if your yearly income doesn’t fall under the taxable category, you need to have a PAN with you as it is of great importance in day-to-day requirements.
Advantages of PAN card
PAN card, whether it is for an individual or a business owner allows an array of benefits that include:
Tax Deductions
The major reason for any individual taxpayer or business owner to have a PAN card is for the taxation purpose. This is because a bank account with no link to the PAN number allows the TDS deduction of 30 percent on an annual interest upon the savings that exceed a total of INR 10,000. When PAN comes into the scenario, the deduction is brought down to 10 percent.
Getting Started with a business
According to the 1961 Income Tax Act, PAN card for any new company was mandated by Indian Government which was later implemented completely in the year 2010. Apart from this, the company needs to provide the TRN or Tax Registration Number and the TRN can be acquired only if one has PAN.
Claiming the Tax refunds
When it comes to IT returns, one has to file it every year. You might or might not be eligible for the refund. However, unless you have a PAN linked to your bank account, the refund amount shall not be returned back to you.
Purchase of a Car
When purchasing a car, it is mandatory that you have a PAN card for the purpose of loan sanction.
Opening a Demat Account
According to the newly modified rules, one cannot open any bank account with no PAN card to show. Only one exception to this rule is the Zero Balance Account which has been provided under the PM’s Jan Dhan Yojna. However, you can apply for the PAN if you need any other type of account with the help of any authorized personnel. After applying for the same, you can check PAN card status by name and date of birth.
Purchase of foreign currency
If you want to buy any foreign currency with the price tag that aligns above INR 50,000, you need to have the PAN card with you. This will allow you to initiate the transaction easily. If you have recently applied for the PAN card, make sure you check for the PAN card status for approval before you seek access to buy any kind of foreign currency.
PAN card makes up for an important piece of document that provides any taxpayer or even non-taxpayer access to numerous services with proper identification as an individual or business entity. Read more articles on PAN card and other important documents on IFSCPedia.com/Blog
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