The importance of
Permanent Account Number
(PAN) card has grown over the years, and it is today an
essential part of our lives.
The most important purpose of allotting PAN to an entity is for the purpose of identification and to track all the related monetary information of that entity.
Initially, the significance of PAN was for filing income tax returns. Over time, PAN was used in dealings with the stock markets, bank and purchase of real estate and vehicles.
Today, PAN has started finding use in unconventional areas as well, as follows:
-BANK FIXED DEPOSITS:
If you open a fixed deposit
with your bank for an
amount exceeding Rs. 50,000, a copy of PAN card needs to be given. In absence of PAN, the bank will deduct TDS of 20% or at the prevailing rate, whichever is higher (instead of the normal 10%). Further, the bank will not issue TDS certificate. Form 15G/15H and other exemption certificates will be invalid in this case.
-PAYMENT IN HOTELS AND RESTAURANTS:
You may be asked to submit a copy of your PAN if you pay cash in hotels or restaurants against bills for an amount exceeding Rs. 25,000.
-PAYMENT TO TRAVEL
Cash payment more than Rs. 25,000 for travel to any foreign country (fare or
purchase of foreign currency) in a single payment requires you to produce your PAN copy.
Nowadays, landlords demand a copy of the PAN card of tenants, as the primary ID proof, while letting out their property.
High-value purchase of jewellery in cash should be
accompanied by a copy of the PAN card of the buyer, mainly as a means to curb black money usage.
Other usages of PAN include:
Payment in Second Hand Car Dealings, Installation of Telephone, Visa Facilitation Centres.
It is seen that quoting or
producing a copy of your
PAN card is compulsory in
practically every money
transaction, and not
restricted to Income Tax dealings. The significance of PAN cannot be questioned as
this has become the primary
document sought in all
important legitimate dealings.
DO NRIs REQUIRE PAN CARD?
As PAN is required for any
financial transaction in India, an NRI will need to have a PAN card if he has an income in India and has to file returns, if he wishes to invest in India, when he carries out banking
transactions, if he purchases
real estate or for any
transaction mentioned above.
BEWARE OF PAN FRAUDS:
The increasing importance of PAN has increased the
likeliness of PAN card identity theft. The safe guarding of the physical copy of the PAN card no longer assures that your card is not being misused.
As a majority of transactions demand a photocopy of your PAN card, or simply quoting the Permanent Account Number, it is very easy for your information to be misused for high ticket purchases or benami property transactions.
A copy of your PAN card or
simply its number can be
quoted in transactions, which you are not even a part of.
IF THIS HAPPENS TO YOU?
When your PAN card is illegally used, you may not even be aware of this for atleast 6 months after the wrong transaction. You can check for such benami transactions by going through your Form 26AS,
which is a consolidated
statement of tax deducted,
along with other details. If
you are a non-tax paying PAN card holder, you may not even be able to check this form. The income tax department will require the PAN card holder to prove that the transaction was not carried out by him, and also give details on his source of funds. This becomes very difficult and time-consuming.
As a PAN card holder, you should take care while disclosing your PAN details to anyone.
You must hand over only signed photocopies and try to reduce using PAN in all casual transactions as ID proof.
(Author is in Exports and Sourcing business)…
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