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| April 26, 2024

Stay Updated: Recent Changes in PAN Card Rules Explained

A PAN or Permanent Account Number is a unique identification number assigned to a taxpayer, be it an individual or a business. Issued by the Income Tax Department under the supervision of the Central Board of Direct Taxes, this 10-digit alphanumeric number is unique to every individual and is a universal identification for every taxable transaction made by the said individual.

These transactions could be anything from TCS (Tax Collected at Source) credits, TDS (Tax Deduction at Source) credits, income tax payments, investments, returns for income/ gift/ wealth, special transactions, correspondence etc.

PAN, issued in the form of a physical card, is a mandatory document that facilitates the linking of other documents, tax transactions, arrears etc and makes retrieval of information such as investment transactions, loans, and business activities (both internal and external) much easier.

A typical PAN Card has a combination of 10 characters and digits as well as the name of the cardholder, DOB, Father's or Spouse's name, and photo. PAN guidelines are made so as to detect and eliminate tax evasion and to widen the tax base. Recently there have been a few amendments and introduction of new rules related to the PAN Card.

Changes in PAN Card rules you should know about -

Mandatory Quoting of PAN for High-Value Transactions 

This rule is a regulatory measure that applies to transactions where the transaction value exceeds a specified threshold. This requirement applies to several transactions including

  • Cash deposits of up to Rs. 10 lakh or more to a savings bank account in one fiscal year.
  • One or More than one term fixed deposit (Not made through renewal of a matured term deposit).
  • Credit card payments greater than Rs. 1 Lakh in cash or Rs. 10 Lakh in any mode of payment.
  • Investment in debentures, bonds, and shares worth more than Rs. 10 lakh.
  • Buying/selling an immovable property that is valued at more than Rs. 30 lakh.

Besides this, quoting your PAN card is required for cash transactions of bank drafts or cheque amounts above Rs. 50,000.

This rule is aimed to create to keep track of financial activities for tax monitoring. It also helps in

  • Curbing black money transactions and tax evasions
  • Tax monitoring and compliance
  • Differentiate taxpayers from non-taxpayers

PAN Adhaar Link 

Both PAN and Adhaar are important identification documents. A PAN Card is important for tracking financial transactions, filing tax returns, and high-value transactions such as property purchases, and investments. Adhaar on the other hand is a unique 12-digit identification number issued by the UIDAI (Unique Identification Authority of India) as a proof of identity and address. It is also used during financial transactions, applying for government services, subsidies and welfare schemes. While both serve various purposes, the intention towards linking PAN and Adhaar has been introduced to streamline transaction processes, promote compliance, as well as

  • Identify multiple PAN numbers
  • Eliminate audit trail fraud
  • Ease filing of returns
  • Keep track of taxes

Under Section 139AA, it is mandatory for all taxpayers to interlink their PAN with Adhaar.

Those who are exempt from the rule are,

  • Residents of Jammu and Kashmir, Assam and Meghalaya
  • An NRI who is not liable to pay taxes as per the Income-tax Act 1961
  • Indian citizens aged 80 or above
  • Not a citizen of India

Who Needs a Pan Card? 

As per the Income Tax provisions, a PAN Card is a necessary document for,

  • Individuals earning a taxable income, such as salary, business profits, capital gains etc.
  • Businesses, partnerships and firms, trusts, and LLPs (Limited Liability Partnerships) to conduct financial transactions, including opening a bank account, filing tax returns or conducting business with government agencies.
  • A foreign individual, expat or investor engaging in financial transactions within the country.

Having a PAN Card facilitates seamless financial transactions.

How to Apply for a PAN Card? 

Applying for a fresh PAN Card is both convenient and efficient and applications can be made online as well as offline.

To apply for a PAN Card online, you can visit the official websites of Protean (formerly NSDL e-Governance Infrastructure Limited) or UTIITSL. An offline application process can be completed at your nearest Muthoot Finance Branch.

PAN application is streamlined through a set of forms - Form 49A and Form 49AA, each catering to different applicants.

Form 49A - An individual who is a resident of India or is a company incorporated in India and wishes to apply for a fresh PAN Card can fill out this form. Also, an individual or a company that wants to update the particulars on their PAN Card must fill out Form 49A.

Form 49AA - Foreign applicants seeking to conduct business transactions, investments or employment in India must apply for a PAN Card online by filling out Form 49AA.

Avail hassle-free PAN Card issuance with us. Visit your nearest Muthoot Finance branch to know more.

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