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July 28, 2023

Know the Uses of PAN Card in India

In today’s digital age, a PAN card is more than just a government-issued identification document. It has become an essential tool for various financial and legal transactions. Whether you’re filing your income tax returns, opening a bank account, or investing in the stock market, a PAN card proves to be beneficial in several ways. Here are some prominent uses of PAN cards:

Filing Income Tax Return: Every individual and organization must have a PAN card as it helps in filing the Income Tax return and claiming the ITR refund.

Opening a Bank Account: All public, private, or cooperative banks require a PAN card from every individual or entity before opening their bank account. It serves as a valid identity proof of a citizen in India.

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Opening a Demat Bank Account: For establishing a Demat bank account and investing in the stock and share market, one must have a PAN card.

Eligibility for Credit/Debit Card: While applying for a debit or credit card, it is mandatory to provide your PAN card details to the financial institution you are applying to.

Fixed and Cash Deposit: For depositing cash of Rs. 50,000 or investing in a fixed deposit amounting to Rs. 50,000, you have to share your PAN card details with the bank.

Insurance Payments: If your insurance amount exceeds the limit of Rs. 50,000, you must share your PAN details with the respective bank.

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Eligibility for Loans: While applying for a loan, lenders and financial institutions need your PAN card information to verify your background.

Purchasing Jewellery: If you buy jewellery worth Rs. 5 lakh or more, you have to submit your PAN details at the time of billing.

Bank Drafts, Cheques, and Pay Orders: A PAN card is required for bank drafts, cheques, and pay orders worth more than Rs. 50,000.

For Investments: When purchasing mutual funds of Rs. 50,000 or more, selling or buying securities worth Rs. 1 lakh or more, or making transactions of Rs. 50,000 or more for investing in securities, PAN card details are necessary.

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Identity Proof: PAN card is accepted everywhere in India and serves as proof of age. It is also required when applying for a driving license, passport, etc.

Buying or Selling Vehicles: If you buy or sell a vehicle worth Rs. 5 lakh, it is mandatory to share your PAN card details.

Selling/Purchasing/Renting Immovable Property: Sharing PAN card details is necessary when buying, selling, or renting immovable property to complete the necessary documents and agreements.

Foreign Currency Exchange and Travel: When converting Indian currency into a foreign one at a foreign exchange office, providing PAN details is mandatory.

Purchasing Services and Goods: PAN card details must be submitted for purchasing any services or goods worth Rs. 2 lakh or more.

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Frequently Asked Questions (FAQs)

Is having a PAN card necessary for everyone?

Yes, all tax-paying individuals who file an income tax return must acquire a PAN card. Additionally, anyone who wishes to be involved in any financial transaction must apply for PAN.

Is PAN a beneficial card for students?

Yes, every student must have a PAN card as per government rules. It helps them in taking education loans or leaving the country for higher studies.

Can I get a PAN card if I am a 17-year-old?

Yes, a minor child below the age of 18 can get a PAN card. However, minors cannot apply for a PAN card directly and must seek the help of their parents or guardians.

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Is sharing your PAN number safe?

No, sharing your PAN number can lead to identity theft and false transactions, potentially involving you in money laundering cases.

Can we share a PAN card copy?

No, you should never share your PAN card copy with an unknown entity or individual as it can be misused in various ways.

How to choose the right PAN card category?

While filling the PAN card application form, ensure that you read the complete eligibility criteria based on whether you are a company, individual, trust, firm, etc. Fill in the form with correct information matching your Aadhaar details.

Having a PAN card is essential for various financial and legal transactions in India. From filing income tax returns to opening bank accounts and investing in securities, a PAN card serves as a valuable identification document. Make sure to have your PAN card and keep it safe for hassle-free financial transactions.

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