Why You Need PAN ? Where quoting PAN is Mandatory ?


Why You Need PAN ? Where quoting PAN is Mandatory ?

PAN card is must in the following cases:

1) If buying or selling a motor vehicle

2)Opening a bank account

3) While applying for a debit or credit card

4) Opening a demat account

5) Payment in cash of an amount exceeding ₹50,000 to a hotel or restaurant against bill at any one time

6) Cash payment of more than Rs. 50,000 in connection with travel to any foreign country or payment for purchase of any foreign currency at any one time

7) Buying mutual funds, debentures, bonds, etc worth more than ₹ 200000

8) Depositing cash of over ₹50,000 in a day in a bank

9) Payment of over ₹50,000 in cash during any one day for purchase of bank drafts or pay orders or banker’s cheques from a banking company or a co-operative bank

10) If investment in fixed deposit exceeds ₹50,000 in one go or aggregating to more than ₹5 lakh during a financial year

11) Payment of more than ₹50,000 in a financial year to pre-paid payment instruments

12) Payment of more than ₹50,000 in a financial year as life insurance premium

13) Selling or buying of securities, other than shares for amount exceeding ₹1 lakh per transaction

14) Sale or purchase, by any person, of shares of a company not listed in a recognised stock exchange for amount exceeding ₹1 lakh per transaction

15) Sale or purchase of any immovable property for an amount exceeding ₹10 lakh or valued by stamp valuation authority referred to in section 50C of the Act at an amount exceeding ₹10 lakh

16) ​Sale or purchase of goods or services of any nature other than those specified above for an amount exceeding Rs. 2 lakh per transaction.

There are certain exceptions of above referred rule requiring PAN quoting, as under:

1) In case of no PAN os there with a person, Income Tax department rules allows to carry out any of the above transactions after signing a declaration in Form 60 which states the person do not hold a PAN and the income is below taxable limit.

2) Minors are allowed to quote PAN of a parent or guardian only if he or she does not have any taxable income.

3) NRIs get relaxation in quoting PANs in some cases.

4) According to rule 114B​​, the central government, state governments and the consular offices are not required to mention PAN card numbers.

Recently, Aadhaar card is allowed to be used in place of PAN. But the said rule is valid only for those who have been allotted a PAN.

If the PAN is not readily available or have been  misplaced it then one can quote your Aadhaar card number instead of PAN.

With effect from September 1, the income tax department has allowed all PAN holders to mention Aadhaar number in lieu of PAN if taxpayer so desired as PAN has been linked with Adhar now.

One can use it not only for filing income tax returns but also for carrying out the above referred  specified transactions for which quoting  PAN is mandatory under the Income TaxAct – 1961.

However, one has to link PAN with Aadhaar.