PAN is a 10-digit alphanumeric code that acts as an identity proof for many people in the country. The PAN card is issued by the Income Tax Department. There are multiple avenues through which an individual/entity can apply for PAN. Companies like NSDL and UTIITSL have been authorised by the IT Department to carry out the processing of a PAN card. One of the primary benefits of PAN card is that it is used for Tax calculations.
Filing Income Tax Returns
The government uses an entity's PAN card details to identify taxpayers in the country. So, to file Income Tax, an individual is required to quote their Permanent Account Number. Failure in citing the PAN details could result in non-filing of the Income Tax returns since the Income Tax Department generally doesn't acknowledge an ITR filing document if the PAN card number is not quoted.
To file Income Tax Refund
It is mandatory for any entity to quote their PAN card number while filing for Income Tax Refund. It is necessary for the PAN card holder to quote the PAN since that is the only way in which the government recognizes the tax-paying entity. Failure to cite the PAN card number could result in rejection of the application for Income Tax Refund and the entity will not receive the refund
Checking the Income Tax Refund Status
Post-filing the Income Tax Refund Application, the applicant can use their PAN card number to know the refund status. The applicant can visit the official website of the Income Tax Department and enter the PAN card number to check the status of your Income Tax refund
For filing TDS Certificate
TDS is a tax collection system which is implemented by the government in India. At the time of disbursing income to the individual, the tax is deducted by the company. The entity that deducts TDS from your income is required to have a TDS certificate. The TDS number must contain the PAN card number of the entity.
Logging in to Income Tax webpage
It is mandatory for entities visiting the Income Tax Department's official website for filing their Income Tax returns online. The registration to the e-filing website also requires the entity to provide their PAN card details
To avoid paying additional taxes
Due to the information on PAN card, the government has all the information regarding all the financial transactions of an individual; it's essential for the individual to provide their PAN card details while filing for income tax so that they don't get overtaxed. For individuals who don't quote their PAN card number while filing their IT returns will be charged a tax of 30% irrespective of the tax slab that they come under.