Permanent Account Number (PAN) is a ten-digit alphanumeric identifier, issued by the Income Tax Department. Each assessee (e.g. individual, firm, company, etc.) is issued a unique PAN.
A PAN is a unique identifier issued to all judicial entities identifiable under the INCOME TAX ACT 1961. The income tax PAN and its linked card are issued under Section 139A of the Income Tax Act. It is issued by the Indian Income Tax Department under the supervision of the CBDT and it also serves as an important proof of identification.
Eligibility for PAN
Existing assessees or taxpayers or persons who are required to file a return of income, even on behalf of others, must have a PAN. Any person, who intends to enter into economic or financial transactions where quoting PAN is mandatory, must also have a PAN.
Types of PAN
- Individual
- HUF-Hindu undivided family
- Company
- Firms/Partnerships
- Trusts
- Society
- Foreigners
Apply by
Section 160 of the IT Act, 1961 provides that a minor, lunatic, idiot, mentally retarded, deceased, wards of the court, and such other persons may be represented through a Representative Assessee.
In such cases,
- In the application for PAN, details of the minor, lunatic, idiot, mentally retarded, deceased, wards of the court, etc. should be provided.
- Details of the representative assessee have to be provided in item 14 of the application for PAN.
Structure of PAN
The PAN (or PAN number) is a ten-character long alpha-numeric unique identifier.
The PAN structure is as follows: AAAPL1234C:
- The first five characters are letters (in uppercase by default), followed by four numerals, and the last (tenth) character is a letter.
- The first three characters of the code are three letters forming a sequence of alphabets letters from AAA to ZZZ
- The fourth character identifies the type of holder of the card. Each holder type is uniquely defined by a letter from the list below:
A — Association of persons (AOP)
B — Body of Individuals (BOI)
C — Company
F — Firm
G — Government
H — HUF
L — Local authority
J — Artificial juridical person
P — Individual (proprietor)
T — Trust (AOP)
E – LLP (limited liability partnership)
- The fifth character of the PAN is the first character of either:
- of the surname or last name of the person, in the case of a “personal” PAN card, where the fourth character is “P” or
- of the name of the entity, trust, society, or organization in the case of a company/HUF/Firm/AOP/trust/BOI/local authority/artificial judicial person/government, where the fourth character is “C”, “H”, “F”, “A”, “T”, “B”, “L”, “J”, “G”.
- The last (tenth) character is an alphabetic digit used as a check-sum to verify the validity of that current code.
Obtain PAN
PAN may be optional or voluntary like a passport, driving license, Aadhaar, etc. However, its use is mandatory at required places, like PAN for high-value financial transactions, driving license for motor driving, passport for foreign travel, etc.
PAN FOR FOREIGN CITIZEN
PAN is an important document for foreign citizens also, who wish to undertake business in India or wish to invest in India. The procedure to obtain PAN is the same as applicable for Indian citizens. However, the application is required to be filed using Form 49AA meant for foreign citizens and submitted at any of the authorized PAN Service Centre through the authorized representative in India. List of documents applicable to foreign citizens.
More than one PAN:
No. Obtaining/possessing more than one PAN is against the law and may attract a penalty up to 10,000. Therefore, it is advisable not to obtain/possess more than one PAN.
Lost PAN card?
If you have lost your PAN card, do not worry. Apply for a duplicate PAN Card online or offline. Login on to NSDL or UTIITSL website, Fill the form 49-A for Indian citizens or Form 49-AA in case of a foreigner and make the payment online for a duplicate copy of your PAN card. The PAN will be dispatched within 45 days.
Compulsory to link Aadhaar with PAN
Section 139AA of the Income Tax Act states that every person who has PAN as on July 1, 2017, is required to link his/her PAN with his/her Aadhaar number. Section 139AA also requires mandatory quoting of Aadhaar while applying for a new PAN and also while filing the return.
