What is the Meaning of PAN Card and Its Full Form?
The full form of PAN is the Permanent Account Number. A PAN is a unique 10-character code made up of letters and numbers, issued to Indian taxpayers. It links all of a person’s tax-related information under one number, which is unique to each individual or business. The PAN Card definition refers to the physical card issued by the Income Tax Department, which displays the PAN number, along with the holder’s name, date of birth, and photo. It can be used as a form of ID or as proof of birth.
Who is Eligible to Apply for a PAN Card?
- Individuals with income above the basic tax exemption limit.
- Individuals earning taxable income on behalf of others (e.g., a minor’s income).
- Professionals or business owners with annual turnover or sales exceeding Rs. 5 lakh.
- Individuals registered under a state’s General Sales Tax Act or the Central Sales Tax Act.
- Anyone involved in financial transactions requiring PAN.
- Charitable trusts that must file returns (under Section 139 (4A)).
- Importers and exporters who need an Import/Export code.
- Individuals required to pay excise duty.
- Individuals with income subject to TDS (tax deducted at source).
- Individuals or their representatives must pay service tax.
- Individuals issuing invoices under Rule 57AE.
Why is a PAN Card Important?
- Identity Proof: It’s accepted by financial institutions and organizations as a valid ID, along with voter and Aadhaar cards.
- Filing Income Tax Returns: It’s required for all individuals and entities eligible to pay taxes.
- Taxation: If your PAN is not linked to your bank account, the bank will deduct 30% TDS on interest over Rs. 10,000 instead of 10%.
- Starting a Business: A business needs a PAN to register for a Tax Registration Number (TRN).
- Claiming Tax Refunds: If excess TDS is deducted, you need a PAN linked to your bank account to claim a refund.
