What is a Permanent Account Number?
Permanent Account Number (PAN) number is a unique number issued by the Income Tax department. PAN number is a 10-digit number, which is issued with a laminated PAN card. The PAN card includes additional details such as photograph and date of birth.
Is a PAN number compulsory?
PAN number is compulsory for the following cases
- Taxpayers with income above the taxable threshold, for examples individuals with income above ₹250,000
- For people in business or profession whose actual sales or turnover is more than ₹500,000
Apart from the above, PAN number is compulsory for anybody who wants to file income tax returns.
Why is a PAN number needed?
PAN number is essential for every correspondence with the income tax department such as filing of taxes, checking status of refunds, etc. Additionally, it is compulsory to quote your PAN number in certain transactions listed below.
- Buying or selling of property
- Buying of selling of motor vehicles
- Purchase or sale of shares above ₹50,000
- Opening of bank accounts
- Making fixed deposits above ₹50,000
- Any payments above ₹25,000 made to hotels
- Applying for new phone connections
Procedure for applying a PAN number
To apply for a PAN number, you need to fill up a form 49A. Some specific pointers for filling up the form:
- The application should be in black ink and in BLOCK LETTERS
- You need to provide two black and white photos along with the form
- Take proper care while choosing the 'Address for Communication' as this will be the address used by the income tax department for all future correspondence
- You should also fill the date of birth properly
As you can see PAN number is very important for every taxpayer.
Use our tax calculator to calculate your income tax liability.
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