Article

Know What Permanent Account Number (PAN) Represents
February 09 , 2013

Permanent Account Number (PAN) is a unique identity number issued by the Income Tax Dept of India. It is mandatory for all tax assessees to have a PAN since the unique number helps the tax department to trace a person's financial transactions. Anyone can have a PAN regardless of whether he/she has income or not. Most financial transactions require PAN of investor/depositor to be quoted in forms.

What is PAN?

The I-T department issues PAN as a permanent laminated card. The PAN card carries your name, PAN number, date of birth, father's name and your signature.  It has 10 characters of alphabets and numerals in a combination that is unique to each PAN card.

Typically a PAN might look like XYZPJ1234K. The first five characters are alphabets, the next four are numerals and the last one is an alphabet. 

First three characters: These alphabets are a random combination from AAA to ZZZ.

Fourth character: It is an alphabet representing the status of the PAN holder as an Income Tax assessee. The list of alphabets for various statuses is below.

A- Association of Persons

B- Body of Individuals

C- Company

F- Firm

G- Government

H- HUF

J- Artificial Judicial Person

L- Local Authority

P- Individual

T- Trust

Fifth character: It is again an alphabet and is the same as the first alphabet of the your surname or last name. 

Sixth to ninth characters: The next four numbers in your PAN come from a random series of 0001 to 9999.

Tenth character: Finally the last alphabet is a check digit generated using codes.

Uses of PAN card in India

PAN is an important tool for checking tax evasion. With PAN it is possible to link all financial transactions, bank accounts, insurance policies and so on of the person concerned. The government has made it compulsory to mention PAN card number in a number of financial transactions -

  • Buying or selling property worth Rs 5 lakhs more
  • Buying or selling motor vehicle excluding 2-wheelers
  • Opening a Bank account or depositing over Rs 50,000 at a Bank/Post Office
  • Making cash payment for bank draft or pay order or banker's cheques of value over Rs 50,000
  • Buying or selling one lakh rupees for sale or purchase of securities;  
  • Getting a telephone connection (includes cell phone connection)
  • Hotel bill over Rs 25,000
  • Foreign travel bills above Rs 25,000
Besides, PAN might be required for rental agreements and big jewelry purchases. While filing I-T returns it is mandatory to quote PAN. It is the duty of the person accepting the bill or the document of financial transaction to ensure PAN is quoted. If PAN is not provided on deposits, income tax is charged at a higher rate on the interest you earn on it.

Creating PAN card

You can apply for a PAN card even if you are not taxable at the moment. You would in any case need one to open a new bank account. You can create PAN for your minor child as well. The process for registering PAN is not a big affair. After all PAN serves as a handy identity proof- it is readily accepted anywhere. You can walk in at one of the centers of UTI Technology Services (UTITSL) or NSDL-TIN and get Form 49A, fill it in and submit it along with a recent, colour photograph and supporting documents.

List of documents accepted for PAN application

1. Identity proof      
  • School Leaving Certificate/Matriculation Certificate/Degree of recognized educational institution      
  • Depository Account Statement
  • Bank Account Statement/Passbook    
  • Credit Card  
  • Water Bill      
  • Rent Receipt/ Property Tax Assessment Order     
  • Ration Card/Passport/Voter Identity Card/Driving License
2. Address proof
  • Electricity Bill
  • Telephone Bill
  • Employer Certificate
  • Depository Account Statement
  • Bank Account Statement/Passbook
  • Credit Card Statement
  • Rent Receipt/ Property Tax Assessment Order
  • Ration Card/Passport/Voter Identity Card/Driving License
You have to pay a fee, which is currently Rs 96 (or Rs 962 for NRIs). You can locate your closest service point in the list of UTI PAN Service Centers or NSDL-TIN PAN Facilitation Centers. Alternately you can apply for PAN card online using the internet through portal of either UTITSL or NSDL-TIN. If your address changes your PAN card does not have to be changed. Remember, the number is permanent throughout your lifetime. However it may change your PAN jurisdiction in the Tax Department's database. So it is good to inform this change by filling the form for New PAN Card and/or Change in PAN details. Similarly change in name, father's name or date of birth must be notified in the same manner. A person should have only one PAN. Possessing more than one PAN is an offence and can be fined for Rs 10,000.

Checking PAN status

Once form 49A has been submitted along with supporting documents and fee your PAN card will be mailed to the address you provided. Meanwhile you can check status of PAN application online at the UTI/NSDL portal by entering the coupon number.

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