The PAN (Permanent Account Number) card is an important document for conducting even the most simplest of financial transactions like opening a savings bank account or applying for a debit/credit card.
It is a 10-digit alphanumeric identity allotted by the income tax department to an individual, company, Firm, Hindu Undivided Family (HUF), AOP, or any other person.
These days you can apply for PAN online, albeit partially. This is because once all the steps have been completed, you still have to send the acknowledgment receipt to National Securities Depository (NSDL) or UTI Infrastructure Technology and Services Limited (UTIITSL) - agencies authorised by the income tax department to facilitate PAN applications on its behalf.
PAN card become a primary documents for many things like, opening a bank account, Buy/Sale of Immovable Property, Investment, Loans, Credit Card, Buy/Sale of Motor Vehicle etc. and in many cases PAN card is accepted as ID proof of individual.
PAN is mandatory to file your Income Tax Return and if your are providing services to client and client deducted TDS from the payment proceeds, here you need to furning your PAN to avoid higher deduction of 20%.
NON-PAN holder get TDS deduction at higher flat rate 20%. Rule 114B of the Income Tax Rule - mention list of transactions and activities wherein PAN is mandatory to quote