It has been made mandatory by the IT Department to quote PAN on return of income, all correspondence with any income tax authority. Since 1 January 2005 it has become mandatory to quote PAN on challans for any payments due to Income Tax Department.It is also compulsory to quote PAN Number in all documents relating to the following financial transactions-
1. Sale or purchase of any immovable property of more than 5 lakh rupees;
2. Sale or purchase of a vehicle, the sale or purchase of a motor Vehicle or vehicle does not include two wheeled vehicles, inclusive of any detachable side-car having an extra wheel, attached to the motor vehicle
3. A time deposit, more than fifty thousand rupees, with a banking company ;
4. A deposit of more than fifty thousand rupees, in any account with Post Office Savings Bank;
5. A contract of a value of more than one lakh rupees for sale or purchase of securities
6. Opening Bank Account
7. Making an application for installation of a telephone connection (including a cellular telephone connection)
8. Payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time ;
9. Payment in cash for purchase of bank drafts or pay orders or banker’s cheques for an amount aggregating fifty thousand rupees or more during any one day;
10. Deposit in cash equal to fifty thousand rupees or more with a bank in any one day;
11. Payment in cash in connection with travel to any of the foreign country of an amount more than twenty-five thousand rupees at any one time.
PAN card is a ten-digit alphanumeric number, issued in the form of a laminated card.
It is now mandatory for all Financial and real estate transaction, Bank Account Opening etc.
Holding PAN card will not automatically open up your tax file with Income tax Department.
PAN card is one time process and need not to be applied again and again.