PAN is also needed to get a KYC (Know Your Customer) compliance. KYC is compulsory to invest in stock markets and mutual funds. An investor investing for the first time with a fund house has to do a KYC with that fund house.
This means that every time an investor is investing with a different fund house, the client will have to do a KYC with that fund house.
Previously, transactions of more than Rs 50,000 needed PAN to be furnished. But now, all stock market transactions require PAN. The above-mentioned rule of furnishing the PAN card necessary for investment is also applicable for those individuals who are not paying tax.
Even if the regular income is below the tax slab and the individual has never ever paid the tax, still client needs to furnish their PAN for investing.
If the individual does not have a PAN, then he/she should apply for one, because PAN is needed not just for investment and income tax filing but has many other uses in day-to-day activities.