Now a days it is mandatory to quote the PAN number in each and every Income tax return. So in this post, PAN is easily explained.
WHAT IS PAN??
A PAN is a 10 digit character alphanumeric number allotted by the income tax department to a tax payer who has eligibility to file income tax return. In a PAN number, the first 3 characters are alphabetic series, the 4th is the status of the PAN holder, the 5th is the 1st character of the PAN holder's name, 6-10th are the special sequential numbers and 11th one is alphabetic check.
WHO CAN HAVE IT??
PAN is compulsory for every person, taxpayers who file the income tax return and for the person who who enters into a financial transaction where quoting PAN is mandatory.
The quoting of PAN became mandatory from 1st November 1998. From 1 January 2005, it is mandatory to quote PAN on challans on any payments which is due to the Income Tax dept.
WHERE IS PAN MANDATORY??
In the following transactions quoting the PAN number is mandatory:
1. Any purchase
or sale exceeding the value of Rs 1 lakh including payment to a
dealer.
2. Sale or purchase of a motor vehicle or vehicle, excluding two wheeler vehicles.
3. When depositing an amount exceeding fifty thousand rupees in Post Office Savings Bank or any bank account.
4. Making an application for installation of telephone connection.
5. Quoting PAN is mandatory when you purchase a bank drafts or pay orders or banker's cheques for an amount aggregating to fifty thousand rupees.
6. A contract of a value exceeding one lakh rupees for sale or purchase of securities.
7. During opening of a bank account. In case of a minor, PAN of father, mother or guardian, as the case may be, shall be mentioned.
8. Any payment made to hotels and restaurants for their bills exceeding twenty-five thousand rupees at any one time.
9. Cash payment in case of foreign travel aggregating to 25000 in one time.
10. Making an application for issue of credit card.
11. During the purchase of Mutual Fund units or purchase of shares if an amount exceeds fifty thousand rupees or more.
12. While acquiring debentures or bonds issued by a company or institution or RBI of an amount of 50000
13. Payment of an amount aggregating fifty thousand rupees or more in a year as life insurance premium to an insurer.
WHAT CAN NON RESIDENTS DO?
Non residents can do such transactions by giving a copy of their passport.
EXCEPTIONS
If payment is via crossed cheque then PAN is not needed.
IF A PERSON IS WITHOUT PAN
Person not having PAN can make a declaration in form no. 60,61 giving particulars of their transactions.
WHAT IS PAN??
A PAN is a 10 digit character alphanumeric number allotted by the income tax department to a tax payer who has eligibility to file income tax return. In a PAN number, the first 3 characters are alphabetic series, the 4th is the status of the PAN holder, the 5th is the 1st character of the PAN holder's name, 6-10th are the special sequential numbers and 11th one is alphabetic check.
WHO CAN HAVE IT??
PAN is compulsory for every person, taxpayers who file the income tax return and for the person who who enters into a financial transaction where quoting PAN is mandatory.
The quoting of PAN became mandatory from 1st November 1998. From 1 January 2005, it is mandatory to quote PAN on challans on any payments which is due to the Income Tax dept.
WHERE IS PAN MANDATORY??
In the following transactions quoting the PAN number is mandatory:
2. Sale or purchase of a motor vehicle or vehicle, excluding two wheeler vehicles.
3. When depositing an amount exceeding fifty thousand rupees in Post Office Savings Bank or any bank account.
4. Making an application for installation of telephone connection.
5. Quoting PAN is mandatory when you purchase a bank drafts or pay orders or banker's cheques for an amount aggregating to fifty thousand rupees.
6. A contract of a value exceeding one lakh rupees for sale or purchase of securities.
7. During opening of a bank account. In case of a minor, PAN of father, mother or guardian, as the case may be, shall be mentioned.
8. Any payment made to hotels and restaurants for their bills exceeding twenty-five thousand rupees at any one time.
9. Cash payment in case of foreign travel aggregating to 25000 in one time.
10. Making an application for issue of credit card.
11. During the purchase of Mutual Fund units or purchase of shares if an amount exceeds fifty thousand rupees or more.
12. While acquiring debentures or bonds issued by a company or institution or RBI of an amount of 50000
13. Payment of an amount aggregating fifty thousand rupees or more in a year as life insurance premium to an insurer.
WHAT CAN NON RESIDENTS DO?
Non residents can do such transactions by giving a copy of their passport.
EXCEPTIONS
If payment is via crossed cheque then PAN is not needed.
IF A PERSON IS WITHOUT PAN
Person not having PAN can make a declaration in form no. 60,61 giving particulars of their transactions.
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