PAN is required because it serves as a universal identification key for all your financial transactions and tax-related activities in India. Here are the main reasons:

• Tax Filing & Compliance – Mandatory for filing income tax returns and ensuring your tax records are correctly linked.

• Tracking Financial Transactions – Helps the Income Tax Department monitor high-value transactions and prevent tax evasion.

• Banking & Investments – Required for opening bank accounts, investing in shares, mutual funds, or fixed deposits above a certain limit.

• Property & Vehicle Transactions – Needed for buying/selling property or vehicles above prescribed values.

• Loan & Credit Applications – Banks require PAN to verify your financial background and tax compliance.