What is PAN and why is it important for an income tax returns filler?

May 19, 2018, 10:46 AM IST
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What is PAN? Permanent Account Number (PAN) is a 10-digit alphanumeric number, issued by the Income Tax Department. PAN enables the Income-Tax Department to link all transactions of a 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 a person with the tax department.

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1. PAN was introduced to facilitate linking of various documents, including payment of taxes, tax assessment, tax demand, tax arrears, etc.of a person. It is not possible to file income tax returns (ITR) if PAN number is not provided. (Image source: Twitter)

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2. PAN also helps the Income Tax Department detecting tax evasion and widening of tax base. (Image source: PTI)

 

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3. It is mandatory to quote PAN on return of income and all correspondence with any income tax authority. (Image source: PTI)

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4. PAN is mandatory for sale or purchase of any immovable property valued at five lakh rupees or more.

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5. PAN is important as it is required for sale or purchase of a motor vehicle or vehicle, one-time deposit of over Rs 50,000 with a bank, deposit over Rs 50,000 with Post Office Savings Bank, a contract of over 1 lakh rupees for sale or purchase of securities, among many other purposes. These are likely to be rejected if a PAN number is not provided.

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