Is PAN Card Mandatory For You? Check Out
Those who are liable to pay tax in India, even minors and foreigners can apply for a PAN card.
The income tax department issues PAN Card as a unique identity document for taxpayers or income tax assesses. PAN is nothing but a Permanent Account Number that has a unique 10-digit alphanumeric number.
Those who are liable to pay tax in India, even minors and foreigners can apply for a PAN card. PAN card is used by the income tax department to keep track of all your financial transactions like tax payments, TDS/TCS credits, returns of income, specified transactions, correspondence, etc. It enables easy retrieval of your information and matching of various investments, borrowings and other business activities.
PAN card is mandatory in these cases
1. If you are accountable to pay income tax or want to file income tax returns (ITR).
2. If you are carrying on any business or profession whose total sale, turnover, or gross receipts are or is likely to exceed ₹5 lakh in any year.
3. Other than the above two cases, the income tax department also has a list of transactions where quoting PAN is compulsory. PAN card is must while selling or buying a vehicle bigger than a two-wheeler, opening a bank account or Demat account, applying for a debit or credit card, paying more than ₹50,000 in cash against a hotel or restaurant bill, buying foreign currency or mutual funds worth ₹50,000, etc.
Who doesn't need a PAN card
1. Minors don't need a PAN card. Minors can quote PAN of their parents or even a guardian in case they are not liable to pay income tax.
2. In some instances, NRIs don't need to quote or have a PAN card even while making a specified transaction.
3. If your income is below the taxable limit, then you do not need to have a PAN card. You can sign Form 60 to carry out specific transactions like opening a bank account, buying mutual funds above ₹50,000, etc., stating that you don't have a PAN card and the income also is below taxable limit.