Pan Card: PAN, which stands for Permanent Account Number, is a crucial document used for filing income tax returns, opening bank accounts, investing in mutual funds, and purchasing property either by an individual or a firm.
What is a PAN number?
Permanent Account Number (PAN) is a 10-digit alphanumeric identifier issued by the Income Tax Department. It functions as a specific identification number for individuals and organizations in India for taxation purposes.
As a laminated card, PAN is issued by the Income Tax Department to companies or individuals who apply for it.
How is PAN number determined?
As per the information on the Income Tax Department’s website, the PAN BFZPK7360L is formatted in the following manner. The initial three characters, BFZ, fall within the alphabetical series from AAA to ZZZ. The fourth character, P, indicates the PAN holder type: P denotes individuals, F denotes firms, C denotes companies, H denotes Hindu Undivided Families (HUFs), and T denotes trusts. The final character, L, signifies the first letter of the PAN holder’s name.
Why is PAN necessary?
It is necessary for the beneficiary to have a PAN to avail government services like subsidy and pension etc.
PAN is necessary to take a loan. This gives the complete history of your financial transactions to the bank or company giving the loan.
When you make a transaction of Rs 50,000 in financial institutions like banks, you need a PAN.
PAN is also an important document while paying income tax or buying property.
From January 1, 2005, it has been made mandatory to enter the PAN number for filling any challan issued by the Income Tax.
It is mandatory to link PAN with Aadhaar
As per Section 139AA of the Income Tax Act, linking Aadhaar with PAN (Aadhaar PAN linking) has been made mandatory for all eligible PAN holders.
