The Indian tax system requires that everyone pays income taxes and any other taxes that are listed in different regulations. The implementation of this law has made it necessary to widen the tax net in order to get as many people as possible to pay taxes. The introduction of the PAN card in the tax system was the best way to net as many people as possible to pay different taxes and adhere to many other regulations. The card is so mandatory that you may not be able to do some things if you do not have it hence making it very essential.

This 10 digit alphanumeric unique identity is what is used to identify people for tax purposes. It is designed to be used in many other transactions where your identity is key to making the transactions authentic. The idea is to keep every financial transaction that comprises of a tax element in track with the main goal of preventing tax evasion.

Should you earn any taxed earnings in India, you need to pay the necessary taxes even if you are a foreigner who pays taxes in India. Companies should also pay taxes when they have a turnover with a minimum of Rs 5 Lakh in the last year before application. Getting this type of number will make sure that you are tax compliant since failure to do so may result to various penalties.

For you to be issued with your own PAN card, it is important to understand whether you should fill form 49A or 49AA. This information can be obtained from the Income tax department of India and visiting the office to apply or applying online. The application process requires that you submit a copy of your national ID and any proof of your place of residence and paying the requisite amount through a demand draft, cheque or cash.

Getting the permanent account number enables individuals to undertake different financial activities including payment of taxes, filing income tax returns as well as in minimizing the taxes they pay. This is actually the number that shows the tax department whether you are compliant to tax laws or otherwise. You will not be able to file for returns or pay direct taxes if you lack the number.

You will also find the number essential in conducting various transactions in India such as when you are buying immovable property valued at least Rs. 5 Lakh. Everyone who is transacting in selling or buying a vehicle, which is not a two wheeler must also disclose his or her PAN number to the taxing authority since a tax charge is involved. Therefore, having such a card becomes mandatory in order to conduct such transactions.

The card is also mandatory if you are transacting amounts exceeding Rs. 25,000 in a hotel, restaurant, and travel to a foreign country. Additionally, payments of over Rs 50,000 to the Indian Reserve Bank when buying bonds are also subject to tax, charged on the number. This makes the card very essential in everyday life in India.

You will also need a PAN card when buying shares exceeding Rs. 50,000 in value. The number will also be needed when depositing over Rs 50,000 in a bank within 24 hrs. Payment of at least Rs 5 Lakh to buy bullions or jewelry also has to be supported by this number.

Learn more about pan status stop by Ashis Jain’s site.