Need for a PAN Card

The permanent account number or PAN has grown in importance and is today a vital part of any financial transaction. The tax department allots the PAN to an individual for the purpose of identification and to relate to various transactions and information pertaining to him.

If your income exceeds the basic exemption limit, you should apply for PAN by May 31 of the relevant assessment year. Any person whose turnover or gross receipts exceed Rs 500,000 and specified charitable trusts should apply for PAN before the end of the said accounting year. Employers filing returns for fringe benefits have no time limit set to apply for PAN.

Using PAN. All returns, quarterly statements, challans or correspondence with the income tax authorities should include the PAN. It is necessary to quote the PAN in documents related to the following transactions:

• Sale or purchase of immovable property valued at Rs 500,000 or more. If there are co-owners (buyer or seller), the PAN of both the owners will have to be mentioned. If a nominee holds the property, the PAN of the legal owner must be mentioned.
  The PAN should be disclosed in the document pertaining to purchase or sale of the property.

• Sale or purchase of a motor vehicle requiring registration other than two-wheelers. This does not include vehicles running on fixed rails or special vehicles for use only in factories or in other enclosed premises or vehicles of less than four wheels with engine capacity of not more than 25 cc.

• A time deposit of more than Rs 50,000 with any banking company and deposit of more than Rs 50,000 with post-office savings bank. This requirement is not mandatory when investing in post-office National Savings Certificate or Kisan Vikas Patra, and the PAN will be required only if the time deposit exceeds Rs 50,000.

• Contract of sale or purchase of securities exceeding Rs 1 lakh in value, including shares, bonds, debentures, derivatives, units and government securities.

• Cash payment of Rs 50,000 or more for purchase of bank drafts, pay orders or bankers� cheques during any one day.

• Cash payment exceeding Rs 25,000 in connection with travel to any foreign country (fare or purchase of foreign currency).

• Application for installation of telephone, including cellular telephone.

• Payment to hotels and restaurants against bills exceeding Rs 25,000 at any one time.

• Opening a bank account.

• Application for issue of a credit card.

• A cash deposit of Rs 50,000 or more with any bank during any one day.

• Payment of Rs 50,000 or more to a mutual fund for purchase of units or to a company for acquiring its shares or to a company/institution for acquiring its debentures/bonds or to RBI for acquiring bonds.

• Minor intending to open time deposit or bank account should quote the PAN of either father or mother or guardian in whose hands income is likely to be clubbed.

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