Permanent Account Number (PAN) is a code that acts as an identification for individuals, families and corporate (Indian or Foreign), 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 ABCDE1234J. 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.
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.
Income Tax 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 Juridical Person
P - Individual
T - Trust (AOP)
K - Krish (Trust Krish) this is nowhere in Income Tax form as well as not known to any person in income tax office
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/ Trust/ 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.
In recent times, 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 to the Assessing Officer.
Prescribed PAN Application Forms