Permanent Account Number (PAN) is a code that acts as identification of Indians, especially those who pay Income Tax. It is a unique, 10-character alpha-numeric identifier, issued to all judicial entities identifiable under the Indian Income Tax Act 1961. An example number would be in the form of AAAPL1234C. It is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and it also serves as an important proof of identification.
Like the Aadhaar Number and Driving License, it is also issued to foreign nationals (such as investors) subject to a valid visa and hence, it is not acceptable as a proof of Indian citizenship.
The PAN is mandatory for a majority of financial transactions such as opening a bank account, receiving taxable salary or professional fees, sale or purchase of assets above specified limits etc; especially high-value transactions.
The primary purpose of the PAN is to bring a universal identification to all financial transactions and to prevent tax evasion by keeping track of monetary transactions, especially those of high-net-worth individuals who can impact the economy.
The PAN is unique to each individual and is valid for the life time of the holder, throughout India. An important point to note would be that once issued, the PAN is not affected by a change of address.
Concerns with PAN Cards
Although there are only 30 million (3 crore) income tax payers in India, yet there are 170 million genuine PANs issued as of 2014. While the alphanumeric PAN number is unique, individuals and corporate entities have been able to obtain multiple PAN cards fraudulently. It is illegal to obtain multiple PANs and there is a penalty of Rs.10,000/= when caught. In addition, there are fake PAN cards due to ubiquitous plastic card printers. Additionally, illegal immigrants have also got PAN cards issued to them; most have used the services of PAN card agents.
One should take due care to refrain from using services of tout agents who claim to provide hand delivery of PAN cards and charge extra.
Please submit your details if you wish to apply for PAN Card
Structure and provisions
IT PAN card is issued under Section 139A of the Income Tax Act. The PAN structure is as follows: AAAPL1234C: First five characters are letters, next four numerals, last character letter. The first three letters are sequence of alphabets from AAA to ZZZ. The fourth character informs about the type of holder of the card. Each holder is uniquely defined as below:
- A — Association of Persons (AOP)
- B — Body of Individuals (BOI)
- C — Company
- F — Firm
- G — Government
- H — HUF (Hindu Undivided Family)
- L — Local Authority
- J — Artificial Judicial Person
- P — Individual
- T — AOP (Trust)
- K — Krish (Trust krish)
The fifth character of the PAN is the first character (a) of the surname or last name of the person, in the case of a "Personal" PAN card, where the fourth character is "P" or
(b) of the name of the Entity, Trust, society, or organisation in the case of Company/ HUF/ Firm/ AOP/ BOI/ Local Authority/ Artificial Judicial Person/ Govt, where the fourth character is "C","H","F","A","T","B","L","J","G". The last character is an alphabetic check digit.
Nowadays, the DOI (date of issue) of the PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card if issued by NSDL and will not be mentioned if issued by UTI-TSL. The central government has introduced a new online service called "Know Your PAN" to verify or validate new and existing PAN numbers.Failure to comply with the provisions of Section 139A of Income Tax Act, penalty of Rs. 10,000/- for each default is payable u/s.272B by Assessing Officer.