Breaking News
Loading...
Wednesday, December 18, 2013

What is PAN?

9:42 PM

WHAT IS PAN?

Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department, to any “person” who applies for it or to whom the department allots the number without an application.
 
PAN enables the department to link all transactions of the “person” with the department. These transactions include tax payments, TDS/TCS credits,returns of income/wealth/gift/FBT, specified transactions, correspondence, and so on. PAN,thus, acts as an identifier for the “person” with the tax department.

A typical PAN is AFZPK7190K.

First three characters i.e. “AFZ” in the above PAN are alphabetic series running from AAA to ZZZ

Fourth character of PAN i.e. “P” in the above PAN represents the status of the PAN holder. “P” stands for Individual, “F” stands for Firm, “C” stands for Company, “H” stands for HUF, “A” stands for AOP, “T” stands for TRUST etc.
 
Fifth character i.e. “K” in the above PAN represents first character of the PAN
holder’s last name/surname.

Next four characters i.e. “7190” in the above PAN are sequential number running from 0001 to 9999.

Last character i.e. “K” in the above PAN is an alphabetic check digit.

WHY IS IT NECESSARY TO HAVE PAN?

It is mandatory to quote PAN on return of income, all correspondence with any
income tax authority. From 1 January 2005 it will be mandatory to quote PAN on challans for any payments due to Income Tax Department.
 
It is also compulsory to quote PAN in all documents pertaining to the following financial transactions :-
 
(a) sale or purchase of any immovable property valued at five lakh rupees or more;
 
(b) sale or purchase of a motor vehicle or vehicle, [the sale or purchase of a motor vehicle or vehicle does not include two wheeled vehicles, inclusive of any detachable side-car having an extra wheel, attached to the motor vehicle;]
 
(c) a time deposit, exceeding fifty thousand rupees, with a banking company ;
 
(d) a deposit, exceeding fifty thousand rupees, in any account with Post Office
Savings Bank;
 
(e) a contract of a value exceeding one lakh rupees for sale or purchase of securities;

(f) opening a bank account;
 
(g) making an application for installation of a telephone connection (including a cellular telephone connection);
 
(h) payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time ;
 
(i) payment in cash for purchase of bank drafts or pay orders or banker’s cheques for an amount aggregating fifty thousand rupees or more during any one day;

(j) deposit in cash aggregating fifty thousand rupees or more with a bank during any one day;
 
(k) payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time.


Newer Post
Previous
This is the last post.

0 comments:

Post a Comment

 
Toggle Footer