PAN Registration , or you can say permanent account number, is a unique 10-digit alphanumeric identity allotted to each taxpayer by the Income Tax Department under the supervision of the Central Board of Direct Taxes. It also serves as an identity proof. PAN Registration is mandatory for financial transactions such as receiving taxable salary or professional fees, sale or purchase of assets above specified limits, buy mutual funds and more.
The PAN number remains unaffected by change of address throughout India.
Why PAN Registration is Important?
PAN Registration is mandatory for various purposes, including, Financial Transactions such as receiving taxable salary or professional fees, sale or purchase of jewellery, motor vehicle and property at a value above specified limits, investment in securities (mutual funds, bonds, debentures and equities), Opening a bank account or demat account, raising loans, Making investment in Fixed Deposits, Cash Deposits and for insurance payments. It also serves as an identity proof. A detailed description of threshold limit is prescribed below.
Primary Objective The primary objective of PAN Registration is to use a universal identification key to track financial transactions that might have a taxable component to prevent tax evasion.
All existing assesses or taxpayers or persons who are required to furnish a return of income, either on behalf of self or others, must obtain PAN. For PAN Registration any person, who intends to enter into economic or financial transactions where quoting PAN is mandatory.