What Is Pan Card ?
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.
- 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)