Why Is PAN Important?

PAN Card is important for taxpayers as it is necessary for all financial transactions and is used to track the inflow and outflow of your money. It is important when paying income tax, receiving tax refunds, and receiving communication from the Income Tax Department. The Indian Budget 2019 proposed that individuals who do not have a PAN can use their Aadhaar number to file returns and for any other purpose where PAN was earlier mandatory. This means that if you have not linked your PAN with Aadhaar yet, or do not have a PAN but have an Aadhaar, you don't have to either link PAN and Aadhaar or apply for a new PAN. However, the rules about this are still in the process of creation/update/approval. That said, PAN continues to be necessary for a large number of monetary transactions. PAN Card also serves as a proof of identity.

The benefits of TAN

•  Tax Deposits :
• When you’re depositing tax, you must quote TAN in documents. TAN is used for deductions such as salary, interest, or dividends. When depositing tax, you must undertake these steps:

•  Use Challan type 281 for the deposit of tax deducted or collected at source.

•  It is important to quote the correct 10-digit TAN, along with the name and address of the deductor on each challan used for depositing tax.

•  For indicating separate sections and the correct nature of payment code in relevant columns, you can use separate challans.
• Unique Identification :
• TAN is a unique identification number given to those who are deducting or collecting taxes at source, on behalf of the Income Tax Department, which makes every individual tax deductor or collector identifiable by his or her TAN.