Permanent Account Number is a 10-digit alphanumeric code issued to every taxpayer in India. It assists the authorities to keep a track on earnings and taxes paid by people in the past, and the amount of tax is required to pay for the current financial year. In addition to this, it assists an individual in filing the income tax. It also acts as an identity proof.
The PAN is provided to:
- Resident Individuals
- Minors individuals
- Foreign Individuals
- Hindu Undivided Families
Importance of PAN Card
- It is necessary to have a PAN card for filings income tax.
- It is essential to submit a PAN card as an identity proof for applying for a loan.
- It is also required while opening a new bank account, it assists in KYC details.
- It assists the government to keep track of payments and transactions.
Some Interesting Facts about PAN card
- PAN Card concept was introduced in 1972.
- A PAN card is not proof of Indian Citizenship.
- Approximately 44 Crore+ PAN Cards are allotted to individuals which include 37% women & 63% male.
- After Apex Court declared it as compulsory to link Aadhaar to PAN by 30 June 2020, approx, 60% of people had linked it.
- For any transaction above 2 Lakhs, an individual is required to provide his PAN.
- PAN is essential while filing Incom Tax Returns.
- PAN is becoming compulsory for opening a new bank account.
- If PAN is issued by NSDL, check the right-hand side beside your picture, you can see the Date of Issue of PAN Card.
- PAN is an essential document for foreigners as well if they intend to undertake business in India or wish to invest in India.
Logic Behind Permanent Account Number Issued–
- The 10 digits of the PAN card is the amalgamation of the first five alphabets, the next four numbers and the last one an alphabet again.
- From the first five characters, the first three are sequences from AAA to ZZZ.
- The fourth character of the PAN represents an entity to which a PAN belongs.
- A for AOP
- B for BOI
- C for Company
- F for Firm
- G for Government
- H for HUF
- L for Local Authority
- J for Artificial Judicial Person
- P for Individual, and
- T for Trust.
- The fifth character of the PAN is the first letter of the surname of the last name for an individual. In the case of non-individual, it is the first letter of the name to which the PAN belongs.
- The next four characters are sequences of numbers running from 0001 to 9999.
- Lastly, the tenth character is a check digit alphabet which is derived based on a formula applied to the previous nine characters.