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Apart from its diverse use in the banking sector, the PAN (Permanent Account Number) card serves many other purposes as a legal identification document. It is mandatory for certain bank transfers, obtaining a gas connection, and much more.
Therefore, having a PAN card number as an identity document is important, even if you don’t pay taxes.
Keep reading to learn why a PAN card is needed for people who are not taxpayers.
A PAN card is commonly used in the banking sector for opening bank accounts, making money transfers, depositing money, and much more. However, apart from being of great use in the financial arena, PAN cards serve a large purpose in selling or reselling property, making loan applications, buying vehicles, and much more.
PAN cards are globally acknowledged as proof of photo identification; thus, having a PAN card number is very important even if you are not a taxpayer.
Apart from banking services, a PAN card may be required for certain professional and personal reasons.
Let us understand why a PAN card is necessary in different scenarios.
You must share your PAN card details to get smooth approval for a personal, business, education, or any other loan from a bank.
To buy a life insurance plan from any insurer, you must provide your PAN card details. If the annual amount paid to the insurer exceeds ₹50,000, then PAN details are to be provided compulsorily.
When travelling abroad, you must provide your PAN card details for cash payments for currency exchange amounting to more than ₹50,000. Thus, it is a globally accepted proof of identification for different purposes.
You must provide a self-attested copy of your PAN card when buying or selling your motor vehicle.
If the transaction involving the purchase or sale of your real estate property exceeds ₹10 Lakh, then the details of your PAN card details must be furnished.
Hotel or restaurant bills exceeding the limit of ₹50,000 require your PAN card details, as per the mandate.
To save tax, a large amount of money is usually invested in mutual funds, which bring this transaction under the mandate of providing the PAN card details. Debentures, bonds, fund units, etc., of more than ₹50,000 require PAN card details. PAN card details are also to be provided when opening a new DeMat Account.
One is required to produce their PAN card when applying for an Aadhaar, and it is compulsory to link your aadhaar card to your PAN, the failure of which can lead to the deactivation of your PAN card.
Any goods or services that cost more than ₹2 Lakh require PAN card details for a successful transaction to take place.
Any individual intending to open a new bank account in a bank or a post office must produce the details of their PAN card. However, this is optional for basic savings bank deposit accounts, which are zero-balance accounts.
A PAN card is widely accepted as a valid proof of identification, and thus, it can be produced legitimately by any citizen of India.
People applying for a credit card from a bank, cooperative, or any other institution must provide their PAN card details.
To avoid the rising cases of money laundering, you must provide your PAN card details when making a cash deposit of more than ₹50,000 in a single day. The same applies to bank drafts, cheques, pay orders, etc., with the same amount limit.
Depositing an amount of ₹5 Lakh or more annually will require you to produce your PAN details, and also, if you invest in a fixed deposit of more than ₹50,000, you must offer your PAN card details to the banks, NBFC, Nidhi, post office, etc.
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