PAN or Permanent Account Number is a unique code which works as a proof of identification for tax paying Indians. All judicial entities that are identifiable under the Indian Income Tax Act, 1961 will be issued a unique 10 character alpha-numeric identifier known as PAN. PAN is issued by the Indian Income Tax Department under the supervision of the Central Board of Direct Taxes. The main aim of PAN is to bring about a universal identification to every financial transaction carried out by an individual and also to prevent evasion of tax. The PAN provided to each individual is unique and is valid for lifetime throughout India.
Structure of PAN in India
The PAN card in India comes in the form of a plastic card. It consists of a facial picture of the PAN card holder, the date of birth of the card holder, the date of issue along with a hologram sticker.Even though the PAN card does not display the address of the card holder, the letter accompanying PAN bears the address of the card holder and hence can be used as address proof.
The PAN has the following structure- AAAPL1234C wherein the first five characters are letters, the next four characters are numerals and the last character is a letter again.Whereas the first four characters are sequence of alphabets from AAA to ZZZ, the fourth character in the sequence indicates the type of card holder. Given below is a list of different types of card holders and the character denoting it.
- A — Association of Persons
- 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 — AOP (Trust)
The fifth character of PAN can either be the surname or last name of the person in case it is a personal PAN or it can be the name of a trust, society, organisation, etc. The last character in the sequence is an alphabetic check digit.
Operating model of PAN in India
Everything to do with PAN including the issuance, delivery, verification and maintenance works on a public private partnership model. The Income Tax Department of India has entrusted entities such as National Securities Depository Limited (NSDL) e-Governance Infrastructure Limited and UTI Infrastructure Technology Services Limited (UTIITSL) to be the service providers for the application, processing, collecting and verifying documents, printing the PAN card and handle other processes related to PAN card. These entrusted agencies obtain the PAN online from the server of Income Tax Department once the application and documents are processed and verified.
Why is it necessary to have PAN?
Quoting PAN is compulsory for filing Income Tax returns, Tax Deduction at Source and other communication with the Income Tax Department. It is also very important in certain financial transactions including Sale or purchase of an immovable property costing more than Rs.5 lakh, purchase of foreign currency, mutual fund purchases, as a document for opening a new bank account and much more. Of lately, it also serves mainly as an address proof.
How to apply for PAN online in India?
One can apply for PAN online without any hassles. One can make the application online through the official websites of NSDL e- Governance or UTIITSL. The application process is pretty simple with both the websites. To apply online for PAN, the individual has to visit one of the websites and download the relevant application form (Form 49A), fill in the form with the correct details, submit the form online and pay the fee for application/ registration. Once the form is submitted and acknowledged, the applicant will receive a receipt, the applicant has to affix the receipt with photographs, sign the receipt and send it to NSDL or UTIITSL based on which website they applied through. The applicant can also track the status of their application online.
How to apply for PAN offline in India?
One can also apply for the PAN offline by downloading the application form, filling it in, affixing the relevant document and submitting to the nearest office to your place. The list of authorised offices where you can submit your PAN application can be found on the official website of the Income Tax Department.