Permanent Account Number
) is unique alphanumeric combination issued to all juristic entities identifiable under the Indian Income Tax Act 1961. It is issued by the Indian Income Tax Department
The government of India imposes an income tax on taxable income of individuals, Hindu Undivided Families , companies, firms, co-operative societies and trusts and any other artificial person. Levy of tax is separate on each of the persons. The levy is governed by the Indian Income Tax Act, 1961...
under the supervision of the Central Board for Direct Taxes
Since 1 January 1964 the Central Board of Direct Taxes has been charged with all matters relating to various direct taxes in India and it derives its authority from Central Board of Revenue Act 1963. The CBDT is a part of Department of Revenue in the Ministry of Finance...
(CBDT) and is almost equivalent to a national identification number
A national identification number, national identity number, or national insurance number is used by the governments of many countries as a means of tracking their citizens, permanent residents, and temporary residents for the purposes of work, taxation, government benefits, health care, and other...
. It also serves as an important ID proof.
This number is almost mandatory for financial transactions such as opening a bank account, receiving taxable salary or professional fees, sale or purchase of assets above specified limits.
The primary purpose of PAN is to bring a universal identification key factor for all financial transactions and indirectly prevent tax evasion
Tax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,...
by keeping a track of monetary transactions of high net worth individuals.
The PAN is unique, national, and permanent. It is unaffected by a change of address, even between states.
Structure and validation
- PAN structure is as follows: AAAAA9999A: First five characters are letters, next 4 numerals, last character letter
- Each assesse is uniquely identified by the PAN
- If the PAN does not follow the above structure, then the PAN will be shown invalid
- The fourth character of the PAN must be one of the following, depending on the type of assesse:
- C — Company
- P — Person
- H — HUF(Hindu Undivided Family)
- F — Firm
- A — Association of Persons (AOP)
- T — AOP (Trust)
- B — Body of Individuals (BOI)
- L — Local Authority
- J — Artificial Juridical Person
- G — Government
- The fifth character of the PAN is the first character
- (a) of the surname / 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/ Organisation in the case of Company/ HUF/ Firm/ AOP/ BOI/ Local Authority/ Artificial Jurdical Person/ Govt, where the fourth character is "C","H","F","A","T","B","L","J","G".
Nowadays, the DOI (Date of Issue) of PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card.
- Fringe Benefits Tax (India)
Fringe Benefits Tax was the tax applied to most, although not all, fringe benefits. A new tax was imposed on employers by India's Finance Act 2005 was introduced for the financial year commencing April 1, 2005...
- Indian Revenue Service
The Indian Revenue Service , abbreviated as IRS, is the revenue service of the Government of India. It is a Central Civil Service...
- Tax Deduction Account Number
Tax Deduction Account Number is an alphanumeric number issued to individuals who are required to deduct tax on payments made by them under the Indian Income Tax Act, 1961.-Significance:* An Assessee cannot obtain a TAN number without having a PAN....