PAN – Permanent Account Number

PAN card is necessary for any financial transaction. The main reason behind making PAN card mandatory was to check the flow of unaccounted money in the Indian economy.

PAN refers to Permanent Account Number. It is a ten digit alphanumeric number issued in the form of a card by the Income Tax Department of India. The alphanumeric number is unique to each card. The PAN card is issued under the directions of Central Board of Direct Taxes (CBDT). From 2005 onwards, it has been made compulsory for all those file their income tax returns to have a PAN number.

It has been made compulsory to quote PAN in all documents related to financial transactions like sale and purchase of a motor vehicle or immovable property or travel to a foreign country.

PAN Card as an Identity Proof

PAN card serves as an authentic piece of evidence that you are the person in the card. PAN card is necessary for any financial transaction. The main reason behind making PAN card mandatory was to check the flow of unaccounted money in the Indian economy.

Today, even to open a bank account the first necessity is to have a PAN number and there is a reason behind it. Earlier, people used to open accounts in two or three banks with different names and different address proofs. Money for large transactions like for buying a property was made from a bank in some other city to evade taxes but now with the introduction of PAN card, each and every financial transaction is under scanner.

No one can open a fake account as the PAN number has to be mentioned and one person cannot have more than one PAN number.

Unique 10 Digits Alphanumeric Number

The PAN number is made of five alphabets, followed by four numerical characters and the last one again is an alphabet.

The PAN card has proved to be a boon for the income tax authorities as they can easily keep track of the financial transactions made by anyone. It has also helped in tracking criminals as it is impossible to live and make financial transactions without PAN number.

How to Apply for a PAN Number?

Applying for a PAN card has been made very simple and convenient by the Income Tax Department. One has to fill Form No. 94. The PAN application can be downloaded from the website of the National Securities Depository Ltd or form the website of UTI Investor services Ltd.

The necessary things you would require are a recent color photograph (stamp size: 3.5 cm x 2.5 cm) to attach on the form. The designation and code of the concerned Assessing Officer of the Income Tax department has to be mentioned in Form 49A. A proof of identity as well as a proof of residence is also required.