PAN: Permanent Account Number
Issued by: Income Tax Department, Govt. of India
Under: Income Tax Act 1961 Section 139A
Structure: Alpha numeric 10 digit number Example - XXXXX1290X
PAN Card: It is plastic card issued by Income Tax Department containing Name, Date of Incorporation, PAN, QR Code, [Date of Birth, Father Name, Photograph only for individual]
WHY IS IT NECESSARY TO HAVE PAN?
It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. From 1 January 2005 it has become mandatory to quote PAN on challans for any payments due to Income Tax Department.
It is also compulsory to quote PAN in all documents pertaining to the following financial transactions :-
(a) sale or purchase of any immovable property valued at five lakh rupees or more;
(b) sale or purchase of a motor vehicle or vehicle, [the sale or purchase of a motor vehicle or vehicle does not include two wheeled vehicles, inclusive of any detachable side-car having an extra wheel, attached to the motor vehicle;]
(c) a time deposit, exceeding fifty thousand rupees, with a banking company ;
(d) a deposit, exceeding fifty thousand rupees, in any account with Post Office Savings Bank;
(e) a contract of a value exceeding one lakh rupees for sale or purchase of securities;
(f) opening a bank account;
(g) making an application for installation of a telephone connection (including a cellular telephone connection);
(h) payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time ;
(i) payment in cash for purchase of bank drafts or pay orders or banker's cheques for an amount aggregating fifty thousand rupees or more during any one day;
(j) deposit in cash aggregating fifty thousand rupees or more with a bank during any one day;
(k) payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time.
(l) making an application for issue of credit card or debit card.
(m) payment of an amount of fifty thousand rupees or more to a Mutual Fund for purchase of its units;
(n) payment of an amount of fifty thousand rupees or more to a company for acquiring shares issued by it;
(o) payment of an amount of fifty thousand rupees or more to a company or an institution for acquiring debentures or bonds issued by it;
(p) payment of an amount of fifty thousand rupees or more to the Reserve Bank of India
(q) payment of an amount aggregating fifty thousand rupees or more in a year as life insurance premium to an insurer
(r) payment to a dealer,—
(i) of an amount of five lakh rupees or more at any one time; or
(ii) against, a bill for an amount of five lakh rupees or more,
for purchase of bullion or jewellery
Sources:
1. https://www.incometaxindia.gov.in
2. https://en.wikipedia.org/wiki/Permanent_account_number
