PAN Full Form-What Is PAN? And Why It’s Important : PAN is an electronic system through which, all tax related information for a person/company is recorded against a single PAN number.
PAN Full form is mentioned below :
|Permanent Account Number|
What is PAN?
PAN is a 10-digit unique alphanumeric number. It is used for the purpose of tax compliance and also to deduct income tax. PAN is the foundation of e-commerce and seamless tax compliance. PAN has multiple uses. For instance, PAN number must be obtained in every financial transaction such as purchasing an air ticket, hotel booking or online grocery shopping. PAN is also used in case of loan or credit card purchases.
Now, how PAN works? PAN Is Required For Various Financial Transactions It is the fundamental of a tax compliance system.
Why is it important?
Taxation of citizens has always been a contentious issue, particularly in the last one year, with tax authorities given orders to detain the data of individuals with unconfirmed PAN numbers. PAN is the number which serves as an identification mechanism to regulate the taxation of an individual. PAN is an electronic system through which, all tax related information for a person/company is recorded against a single PAN number. Currently, there are 34 million PAN holders in India, but only 50 million taxpayers of the total 99.5 million companies registered with the Registrar of Companies (ROCs) in India are PAN-compliant. Hence, PAN is a system through which all such entities can file returns, as well as pay taxes online without much hassle.
How are PANs allotted?
PAN is an allotted to a person for identification purpose, and an individual can obtain it in several ways. All you need is an Aadhaar card number. The individual has to register with the Central Board of Direct Taxes (CBDT) for getting an Aadhaar and an individual PAN. The tax department issues an enrolment ID number which can be used for registering with the CBDT. PAN is issued based on the address of the person and it can be changed at any time. You can create a PAN for a new address, which is not in your tax records. However, when you get the current PAN, you have to declare the new address. If you haven’t done this, PAN would be invalidated. The details in PAN Whenever you file tax returns, your PAN would be linked to the details given in the tax return.
What is the difference between an individual and company?
Well, it is because of the income tax return filing. For individual, filing income tax return is mandatory. But filing for tax return is not required for companies How is PAN beneficial? PAN is beneficial as the tax payers can simply put down his/her PAN number at any business or company and a payment can be made in that amount without worrying about hidden accounts.
Let us see some benefits of PAN :
1) The e-transactions on PAN are fast and secure.
2) When a person buys something online or by using debit or credit card the transaction is considered legal and no-questions asked.
3) In case of any medical emergency, citizens can directly go to a doctor using PAN card.
4) PAN number is the basic identification for businesses as it gives them a virtual store to showcase their products.
What are the penalties for dodging PAN?
Merely being not registered in PAN will now attract penalty, even if there is no turnover of taxable income Under the regime, even a service provider can also have PAN. However, there is a new provision for paying penalty to a person even for not filing the tax return How PAN works? According to the finance ministry, PAN is used to comply with various legal requirements and it is required for any transaction involving tax, customs, etc. It is also needed for certain financial transactions, such as money transfer, opening a bank account or making any financial transaction through an electronic payment system. It is mandatory to link PAN with Permanent Account Number (PAN) for income tax, indirect tax and payroll tax to avoid multiple taxation.
I hope you learned enough from our post about : PAN Full form| What is PAN-Importances,Taxes,How to get one ?
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