What is PAN ?

Loans: If you require to take out a loan, all loan providers, both banks as well as other lending institutions, require you to submit details of your PAN at the time of loan application.

All loans, from education loans to personal loans require PAN details for the loan to be approved.

Fixed Deposits: If you plan on investing your money in a Fixed Deposit (FD) amounting to above Rs. 50, 000 in a bank, you will have to provide your PAN details. This is done as the bank will deduct TDS (Tax Deductible at Source) on the FD interest amount.

Cash Deposits: If you are making a cash deposit that amounts to over Rs. 50, 000 at a time, you will have to submit your PAN details as well. This is in keeping with the RBI mandate, which directs banks to report any large cash deposits to the RBI, as a way to prevent money laundering.

Telephone Connections: If you wish to get a new telephone or mobile phone connection, it is mandatory to submit your PAN details, as private cellular operators will not provide you a connection without it.

Insurance Payments: As per the Income Tax Department directives, PAN card details have to be furnished when making an insurance payment exceeding Rs. 50, 000 a year.

Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated tamper proof card, by the Income Tax Department of India.

The Permanent Account Number (PAN) is unique to an individual or entity and it is valid across India. Permanent Account Number once allotted to an individual or entity is unaffected by a change of name, address within or across states in India or other factors

The purpose of having a pan card is strengthened from the fact that from 1 January 2005 it has been made mandatory to quote Permanent Account Number (PAN) on challans for any payments due to Income Tax Department (ITD), while filing returns of income and all correspondence with any income tax authority. Thus Purpose of having Pan Card has become mandatory.

PAN is required to be quoted in the deed made during sale or purchase of any immovable property valued at five laksh rupees or more.

Copy of PAN is required during Sale or purchase of a motor vehicles having more than two wheels excluding detachable side-car attached to the two wheeler.

Permanent Account Number or PAN is a 10-digit alphanumeric number that is issued by the department of Income Tax.

Benefits of PAN card also extends to various banking transactions

PAN is required for opening a bank account in both private and nationalized banks.

A PAN card has:

Your name
Your father’s name (even in case of married women)
Your date of birth
The Permanent Account Number
Your signature
Your photograph

Banks, private or nationalized, emphasize on importance of PAN to entertain Time Deposit exceeding fifty thousand rupees.

PAN is a vital number used by the department of Income Tax to track all financial information related to you.

PAN is also required while making payment in cash for purchase of bank drafts or pay orders or banker's cheques for an amount aggregating to fifty thousand rupees or more during any one day.

Deposit in cash aggregating to fifty thousand rupees or more with a bank during any one day requires PAN.

If you are an income tax assessee, and have to file income tax returns, then you need to have a Permanent Account Number

if you do not file income tax returns but are entering any transaction where quoting the PAN is compulsory (as listed in above examples), you need a PAN.

The department of Income Tax has authorized UTI Investor Services Ltd (UTIISL) and National Securities Depository Limited (NSDL) to issue PAN numbers and cards on its behalf

Application for a new PAN has to be made using form 49A – “Application Form 49A – Application for Allotment of Permanent Account Number (PAN)“

Importance of PAN is emphasized during transactions involving other financial instruments
1.Deposit, exceeding fifty thousand rupees, in any account with Post Office Savings Bank.
2.Contract of a value exceeding one laksh rupees for sale or purchase of securities.

Making an application for installation of a telephone connection (including a cellular telephone connection) requires a PAN.