The PAN card is an exceptionally important document for every individual and entity. Though it has a reputation for being important merely to be used by the Income Tax Authority for tracking tax payments, this is not the case anymore. The PAN card has now become an important component of many day-to-day transactions as well.

There are many benefits and spaces where the PAN card is needed. Here, we will delve deeper into all of them.

• A PAN card can be used as proof of identity in all financial institutions and organisations.
• It also helps tax authorities in many aspects, including helping gauge a country’s total tax revenue.
• Linking a PAN card with the Aadhaar is mandatory to eliminate problems like multiple PAN issues under a single name.

Here are some benefits offered by a PAN card to individuals.

1. ITR filing

Any earning individual who pays their income tax is also expected to file their IT returns. This is one stage where the PAN card plays a crucial role. Without a PAN card, you cannot file your income tax returns.

2. Identity proof

Like other identity proofs, such as Aadhaar or even your Voter ID, a PAN card is valid and is accepted by all financial institutions and organisations.

3. Tax deductions

Another crucial area where the PAN card plays a significant role is taxation. If you forget to link your PAN card to your bank account and your yearly interest earnings on your savings exceed Rs. 10,000, the bank deducts 30% TDS instead of 10%.

4. For starting a business

Any individual or company looking to start a business needs to have a PAN registered in its name. Every business needs a Tax Registration Number (TRN), which can only be obtained if the business has a PAN card.

5. To open a bank account

All public, private, and cooperative banks have now made it mandatory that any individual or company wishing to open a savings or current account must have a PAN card. The only exception to this rule is when a person opens a zero-balance account with the Pradhan Mantri Jan Dhan Yojana scheme. Here, a person can use a voter card or other identity proof.

6. To open a Demat account

If you want to enter the world of trading, you need to open a Demat account. In this context, too, a PAN card is mandatory for any individual looking to open a Demat account.

7. Sale or purchase of immovable assets

Here’s another benefit of a PAN card that might not be very well known. With a PAN card, individuals or entities can easily sell or purchase immovable assets. The PAN needs to be quoted in any sale or purchase deed valued at Rs. 10,00,000 or more.

8. Overseas travel

A PAN card is required to carry out any cash payment related to travelling overseas worth more than Rs. 50,000, inclusive of forex purchase.

While PAN has many benefits for the individual, it also provides various benefits to tax authorities.

1. It helps the income tax authority keep track of an individual or a company’s financial transactions, allowing them to assess their tax liability better.
2. PAN tracking also helps reduce the chances of tax evasion by individuals or companies.
3. PAN helps tax authorities gauge the total tax revenue being generated in the country.
4. Tax authorities also get help from PAN when it comes to fixing the rate at which an entity should be taxed based on its earnings.

If an individual already has an Aadhaar card, they must link it with their PAN card. This linking is mandatory for tax filing purposes and eliminates the issuing of multiple PANs under a single name.

The PAN card plays a huge role in helping both the holder and the government. It can be used as proof of identity and to open bank accounts for cardholders. For tax authorities, it helps gauge the total tax revenue being generated in the country, among other things.

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