Why Is there a Need for me to Show my PAN for a Loan Below 50 Thousand?

In India, providing your PAN (Permanent Account Number) is a mandatory requirement for various financial transactions, including applying for loans, regardless of the loan amount.

• The Income Tax Department of India mandates the use of PAN to track financial transactions and ensure tax compliance. Lenders are required by law to collect PAN details from borrowers for reporting purposes.

• PAN serves as a unique identification number for individuals in India. Lenders use PAN to verify the identity of borrowers and assess their creditworthiness before extending a loan.

• PAN details are essential for documenting financial transactions, including loans. Lenders are required to maintain records of loan transactions, and PAN helps in accurately identifying the parties involved.

• PAN facilitates loan disbursement and repayment tracking. It ensures that loan amounts are disbursed to the correct individuals and enables lenders to monitor loan repayments and report interest income to the tax authorities.