A PAN card and its working point primarily refer to the Permanent Account Number (PAN) system in India, which is used for taxation and financial identification purposes. Here's an explanation of what a PAN card is and how it works:
PAN Card:
A PAN card is a unique, ten-character alphanumeric identifier issued by the Income Tax Department of India. It serves as an essential document for various financial transactions and activities. The PAN card includes details such as the individual's or entity's name, date of birth or incorporation, photograph, and the PAN itself. It is used as a means of tracking various financial transactions, including tax payments, investments, and other financial activities.
Working Points of PAN Card:
Tax Identification: The primary purpose of a PAN card is to serve as a tax identification number. It's mandatory for individuals and entities, including businesses, to have a PAN when engaging in financial transactions that attract tax implications.
Income Tax Filing: PAN is crucial for filing income tax returns. Every taxpayer is required to provide their PAN while filing taxes. The PAN helps the tax department track an individual's financial transactions and income, ensuring compliance with tax regulations.
Financial Transactions: PAN is required for various financial transactions, including opening a bank account, buying or selling immovable property, investing in securities, making large cash deposits, and more.
Business Transactions: For businesses, having a PAN is essential for various activities like opening a bank account, applying for loans, registering for Goods and Services Tax (GST), and conducting business transactions that involve tax payments.
Identification: PAN serves as a form of identification. It's often requested as proof of identity when applying for various services, such as applying for a new mobile phone connection, getting a gas connection, or even for official documentation.
Preventing Tax Evasion: The PAN system helps the government track financial transactions and identify cases of tax evasion. It enhances transparency and accountability in financial matters.
International Transactions: PAN is required for certain international financial transactions, such as sending or receiving foreign remittances, as part of the Know Your Customer (KYC) process.
The process of obtaining a PAN card involves submitting an application to the Income Tax Department or authorized service providers, along with necessary documents and fees. Once issued, the PAN remains the same throughout an individual's or entity's lifetime and is used for various financial and identification purposes.
