What is Permanent Account Number (PAN)? Is it compulsory to obtain and quote PAN?

Permanent Account Number is a ten character unique number allotted to a person by the Income tax Department. It is compulsory for the following persons to apply for the allotment of PAN if he has not already been allotted one :

(i) Every person who has taxable income during any previous year (financial year).

(ii) Every person carrying on any business or profession whose total sales, turnover or gross receipts are or is likely to exceed Rs.5 lakhs in any previous year.

It is compulsory to quote PAN in all returns of income and every correspondence with Income-tax authorities and in all challans used for the payment of tax. As per recent notification issued by Director General of Foreign Trade and Central Excise Department, PAN is required to be quoted by all holders of Import/Export Code (IEC) and all Central Excise assessees. PAN is also to be quoted in all documents pertaining to the below mentioned transactions :-

(a) Sale or purchase of any immovable property valued at Rs.5 lakhs or more;
(b) sale or purchase of a motor vehicle which requires registration by a Registering Authority other than 2 wheelers;
(c) a time deposit exceeding Rs.50,000 with a banking company;
(d) a deposit exceeding Rs.50,000 in any account with Post Office Savings Bank;
(e) a contract of a value exceeding Rs.10 lakh for sale or purchase of securities;
(f) opening an account with a banking company;
(g) making an application for a telephone connection including a cellular telephone connection;
(h) payment to hotels and restaurants against their bills for an amount exceeding Rs.25,000 at any one time.
(i) Payment in cash for purchase of bank drafts or pay orders or bankers cheques from a banking company for an amount aggregating fifty thousand rupees or more during any one day.
(j) Deposit in cash aggregating fifty thousand rupees or more, with a banking company.
(k) Payment in cash in connection with travel to any foreign country of an amount exceeding twenty five thousand rupees at any one time