From UPSC perspective, the following things are important :
Prelims level : PAN
Mains level : Income tax reforms in India
The Union Finance Ministry has launched the facility for instant allotment of (Permanent Account Number) PAN.
Try this question from CSP 2018:
Q.) Consider the following gatemen.
1. Aadhaar card can be used as a proof of citizenship or domicile.
2. Once issued, the Aadhaar number cannot be deactivated or omitted by the Issuing Authority.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Can’t you expect a similar question based on PAN card? If not , go through this newscard.
What is a Permanent Account Number?
- A PAN is a ten-character alphanumeric identifier, issued in the form of a laminated “PAN card”, by the Income Tax Department.
- It is issued to any “person” who applies for it or to whom the department allots the number without an application.
- A PAN is a unique identifier issued to all judicial entities identifiable under the Indian Income Tax Act, 1961.
- The income tax PAN and its linked card are issued under Section 139A of the Income Tax Act.
- It is issued by the Indian Department under the supervision of the Central Board for Direct Taxes (CBDT) and it also serves as an important proof of identification.
- It is also issued to foreign nationals (such as investors) subject to a valid visa, and hence a PAN card is not acceptable as proof of Indian citizenship.
Uses of PAN
- The primary purpose of the PAN is to bring a universal identification to all financial transactions and to prevent tax evasion by keeping track of monetary transactions.
- The PAN is mandatory when filing income tax returns, tax deduction at source, or any other communication with the IT Department.
- PAN is also steadily becoming a mandatory document for opening a new bank account, a new landline telephone connection / a mobile phone connection, purchase of foreign currency, bank deposits above ₹50,000, purchase and sale of immovable properties, vehicles etc.
Why it is in the news?
- A PAN is necessary for filing income tax returns.
- This facility is now available for those PAN applicants who possess a valid Aadhaar number and have a mobile number registered with Aadhaar.
- The allotment process is paperless and an electronic PAN (e-PAN) is issued to the applicants free of cost.