When is a PAN Card mandatory? Know the legal limits.
A PAN card is your 'Tax ID'. You don't need it for everything, but you MUST have it for big money things. For example, if you want to buy a car, get a bank loan, or buy/sell a house worth more than Rs 10 Lakh, you need a PAN. It helps the government make sure everyone is paying their fair share of taxes.
Constitutional Basis: Article 265 — Taxes not to be imposed save by authority of law
The government can only collect taxes through a clear legal process. The PAN card is the primary tool for the state to track income and ensure fair taxation.
Legal Reality & Statutory Framework
Governed by the 'Income Tax Act, 1961'. Rule 114B lists the transactions where PAN is mandatory. These include: 1. Cash deposits above Rs 50,000 in a day. 2. Buying/selling property above Rs 10 Lakh. 3. Opening a bank account (except Jan Dhan). If you don't have a PAN, you must fill 'Form 60', which is a declaration that you don't have one.
Practical Example
If you try to deposit Rs 1 Lakh in cash at a bank, they will legally demand your PAN card.
Recommended Action Steps
- Apply for a PAN card online via the NSDL or UTIITSL portals for about Rs 110.
- Always link your PAN with your Aadhaar, otherwise your PAN will become 'Inoperative'.
- Never share your PAN number on unknown websites or with strangers.
- If you lose your PAN card, you can download an 'e-PAN' immediately from the official portal.
Frequently Asked Questions (FAQs)
Q: Can I have two PAN cards?
A: No! Having two PAN cards is a crime. You can be fined Rs 10,000 under Section 272B of the IT Act if you have more than one.
Q: Is PAN mandatory for a salary of Rs 10,000?
A: Technically no, but most companies require it for TDS (Tax Deduction at Source) and filing their own tax returns.
Q: Can a minor (under 18) get a PAN card?
A: Yes. Minors can apply for a PAN card through their parents or guardians. It is often needed for investments in the child's name.
Q: What if I don't link PAN with Aadhaar?
A: Your PAN will become 'Inoperative,' meaning you cannot use it for bank transactions or file your tax returns.