Lucknow. In the Indian financial system, Permanent Account Number i.e. PAN card is not just an identity card but has become the biggest financial identity of every citizen and business organization. It is a unique 10 digit alphanumeric (a combination of letters and numbers) number issued by the Income Tax Department of the Government of India. At present, PAN card is a mandatory document for banking, investment, tax filing and any major financial transaction. It directly reflects the tax and financial status of any person or company, thereby maintaining transparency in the country’s economy.

Mandatory for tax tracking and income tax returns (ITR)

The main function of PAN card is to keep all the tax records of the taxpayer organized at one place. How much tax a person has paid, how much TDS has been deducted or how much refund he has to get, all this is tracked through PAN. If your income falls under any tax slab, it is impossible to file Income Tax Return (ITR) without PAN number. This is the biggest means of preventing tax evasion and keeping government records in order.

Role of PAN card in banking and big investment

In today’s era, it is very important to have a PAN card to open a new bank account, make a fixed deposit (FD) above a certain limit, invest in the stock market, mutual funds or bonds. Apart from this, it is mandatory to give PAN number during purchase and sale of expensive properties and during big transactions. According to government data, more than 80 crore PAN cards have been issued in India so far, reflecting the increasing financial inclusion in the country.

Control of fraud and the losses incurred if it is not done

Since only one PAN number is allotted to an individual or organization for the lifetime, it is impossible to manipulate it by creating a fake identity. If someone does not have a PAN card, he may face hindrance in availing banking services, heavy fine or extra TDS deduction. By law, holding more than one PAN card is a punishable offense which can attract a heavy fine.

What is the main difference between PAN and Aadhar card?

Often people get confused about both the documents, although the purpose of both is completely different. While Aadhaar card is a proof of citizenship, personal identity and address of a person, PAN card purely records his tax and financial transactions. To increase financial transparency, the government has now made it completely mandatory to link PAN and Aadhaar.