Permanent Account Number (PAN) is a code that acts as an identification for individuals,
families and corporates (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 A008113003.
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.
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 lifetime 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.
Structure and provisionsEdit
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 AuthorityJ — 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.