Permanent Account Number (PAN) is a ten-digit unique alphanumeric number issued by the Income Tax Department. Having PAN card is necessary as it enables the department to link all transactions of the assessee with the department.
Such transactions include tax payments, TDS/TCS credits, returns of income, specified transactions, correspondence and so on.
It will help to trace information of assessee and matching of various investments, borrowings and other business activities of assessee.
It is mandatory to quote PAN on return of income and therefore having a PAN card is compulsory for all assesses or taxpayers.
PAN should be obtained by:
- Every person if his total income or the total income of any other person in respect of which he is assessable during the previous year exceeds the maximum amount which is not chargeable to tax.
- A charitable trust who is required to furnish return under Section 139(4A).
- Every person who is carrying on any business or profession whose total sale, turnover, or gross receipts are or is likely to exceed five lakh rupees in any previous year.
- Every importer/exporter who is required to obtain Import Export code.
- Every person who is entitled to receive any sum/income after deduction of tax at source.
- Any person who is liable to pay excise duty or a producer or manufacturer of excisable goods or a registered person of a private warehouse in which excisable goods are stored and an authorized agent of such person.
- Persons who issue invoices under Rule 57AE requiring registration under Central Excise Rules, 1944.
- A person who is liable to pay the service tax and his agent.
- Persons registered under the Central Sales Tax Act or the general sales tax law of the relevant state or union territory.
- Every person who intends to enter into specified financial transactions in which quoting of PAN is mandatory.
Any individual should not hold more than one PAN. However, if found out, there is a penalty of Rs. 10,000/- imposed under section 272B of the Income-tax Act, 1961 for having more than one PAN.
In case if you have been allotted more than one PAN then one should immediately surrender the additional PAN card(s).