Why do we need a PAN Number?
PAN contributes to the Indian financial and taxes system in a number of significant ways. The primary reasons for needing a PAN number are as follows:
1. Filing Income Tax Returns: Every person or company in India that has taxable revenue is required to have a PAN. It aids in the government’s proper tracking and estimation of tax liabilities.
2. Tax Purposes: PAN is used for tax purposes to connect different financial activities and revenue to the taxpayer. For the purpose of computing and collecting taxes, this connection is crucial. It enables the government to track down those who evade taxes and make sure tax laws are followed.
3. Loan Applications: When people or organisations apply for loans, credit cards, or other types of credit, banks and financial institutions demand PAN information.
4. Property Transactions: For transactions involving real estate, such as the purchase or sale of a home, a PAN is required.
5. Identification: For many official and non-official reasons, a PAN card is frequently accepted as evidence of identity and address.
6. Government Services: PAN is necessary in order to use a number of government services, such as applying for passports, obtaining subsidies, and bidding on government contracts.
7. Preventing Tax Evasion: Combating tax evasion and increasing transparency in financial transactions are two important roles that PAN plays. The government can spot errors and take the proper action by monitoring financial activity using PAN.