The government introduced the Permanent Account Number (PAN) to facilitate the correlation of data regarding investments, loans, and other business undertakings of taxpayers obtained from different channels, aiming to broaden tax coverage.
According to Section 139AA of the Income Tax Act, 1961, it was compulsory to link the Aadhaar number with the PAN by June 30. The Central Board of Direct Taxes (CBDT) has outlined guidelines stating that failure to link the two will result in the PAN becoming inoperative starting from July 1, 2023.
There are 10 Types of Financial Transactions You Cannot Do With an Inoperative PAN Card:
- Creating an account with a banking company or a cooperative bank.
- Applying for the issuance of a credit or debit card.
- Initiating the process of opening a demat account with a depository, participant, securities custodian, or any other authorized entity regulated by the Securities and Exchange Board of India (SEBI).
- Cash payment of an amount exceeding Rs 50,000 to a hotel or restaurant in a single transaction.
- Making a cash payment of an amount exceeding Rs 50,000 for travel to a foreign country or for purchasing foreign currency in a single transaction.
- Paying an amount exceeding Rs 50,000 to a mutual fund for the purchase of its units.
- Making a payment of an amount exceeding Rs 50,000 to a company or institution for acquiring debentures or bonds issued by them.
Making a payment of an amount exceeding Rs 50,000 to the Reserve Bank of India (RBI) for the acquisition of bonds issued by the bank.
- Making cash deposits exceeding Rs 50,000 in a single day with a banking company or a cooperative bank.
- The sale or purchase of shares of a company, not listed on a recognized stock exchange, by any individual, for an amount exceeding Rs 1 lakh per transaction.