PAN or Permanent Account Number, is a unique 10-digit alphanumeric identity allotted to each taxpayer by the Income Tax Department of India under the supervision of the Central Board of Direct Taxes.
PAN is mandatory for financial transactions such as receiving taxable salary or professional fees, sale or purchase of assets above specified limits, buy mutual funds and more. It also serves as an identity proof.
The primary objective of PAN is to use a universal identification key to track financial transactions that might have a taxable component to prevent tax evasion.
All existing assessees or taxpayers or persons who are required to furnish a return of income, either on behalf of self or others, must obtain PAN. Any person, who intends to enter into economic or financial transactions where quoting PAN is mandatory, must also obtain PAN.
- Sale/Purchase of Immovable Property valued more than ₹ 10 lakh.
- Sale/Purchase of all four-wheeler vehicles.
- Time Deposit with banks aggregating more than ₹ 5 lakh per annum.
- Opening an account with a banking company.
- Foreign Travel
- Cash purchase of bank drafts/pay orders/banker’s cheques exceeding ₹ 50,000 a day.
- Payment of mutual funds exceeding ₹ 50,000.
- Payment of Life Insurance Premium exceeding ₹ 50,000 a year.
- Purchase/Sales of goods/services exceeding ₹ 2 lakh per transaction.
- For getting Subsidy on Gas Cylinders/PNG.