PAN Card is the definitive identity proof of an Indian citizen as far as his or her finances such as bank accounts, income tax filing and payment, etc are concerned. As per the Indian Income Tax Act of 1961, it is issued by the Indian Income Tax Department to those whoever requires to earn a taxable income as well as professional fees. It is a code that is unique to each person it is issued to; containing both alphabets and numbers. However PAN is not valid as an ultimate proof of identity given it does not contain an address- besides it can be issued to foreign
citizens residing in India as well- who might be investing in projects.
The PAN is mandatory when one wants to carry out the following procedures- filing for income tax returns, for deductions and other services of the ITD. Other uses of the PAN is for obtaining a phone network connection both landline and mobile; bank deposits of a higher value than Fifty Thousand Rupees, for purchasing a four-wheeler as well as obtaining a loan for the same.
A PAN card can be availed easily on online application within two to three weeks. A person or company without an issued PAN earning a substantial interest on their savings (above Rs.10,000 annually) faces a deduction of 30% of the total in the name of taxes - while those with identity pay only 10%. PAN card has now become mandatory for opening a business since 2010, as per the Income Tax Act 1961. Shareholders who shall be needing a dematerialised account (demat) also require the PAN card as a proof of identity for the holder.