PAN Card Update: In an effort to streamline the financial activities, the Centre Government has introduced a new requirement for taxpayers. As per Section 139AA of the Income Tax Act, 1961, it was mandatory to link Aadhaar number with permanent account number (PAN) by June 30.
For those who failed to do so, their PAN became inactive from July 1, 2023. Now, what does an inactive PAN card mean for you?
It means certain financial transactions will not be carried out if the PAN card is not active.
Check details here:
- If your PAN card is not active, you will not be able to open a regular bank account, except for certain types like time deposits and basic savings bank deposit accounts.
- You cannot apply for credit or debit cards without an active PAN.
- You cannot open a demat account with SEBI-registered entities without an active PAN Card.
- Moreover, you also cannot make cash payments exceeding Rs. 50,000 to hotels or restaurants at one time.
- If you PAN card is inactive, then making cash payments more than Rs 50,000 for foreign travel or purchasing foreign currency at one time will be off-limits.
- Suppose you want to invest in mutual funds and the payment exceeds Rs 50,000, you cannot do it without an active PAN.
- Getting debentures or bonds issued by companies or institutions will need payments below Rs 50,000 if your PAN is inactive.
- Getting bonds issued by the Reserve Bank of India will not be possible if the payment exceeds Rs. 50,000 and your PAN is inactive. Apart from this, depositing cash more than Rs50,000 in a day with banks or co-operative banks will be restricted.
- In case you need to purchase bank drafts, pay orders or banker’s cheques from banks or co-operative banks, cash payments exceeding Rs. 50,000 in a day won’t be allowed.
- Making FDs more than Rs. 50,000 or aggregating to more than Rs. 5 lakh during a financial year with banks, post offices, Nidhis, or NBCs will be prohibited.
- If you are making payments exceeding Rs. 50,000 in a financial year for one or more prepaid payment instruments, such as mobile wallets, will not be possible with inactive PAN.
- Making payment for life insurance premiums exceeding Rs. 50,000 in a financial year to an insurer will require an active PAN.
- Signing contract for the sale or purchase of securities (other than shares) for an amount exceeding Rs. 1 lakh per transaction will be restricted.
- Making deals in sale or purchase of shares of an unlisted company for an amount exceeding Rs. 1 lakh per transaction will not be allowed without an active PAN.
Also read: How To Change PAN Address Using Aadhaar Card