What is PAN and what you need to know about it?

Goodreturns:Friday, May 11, 2012, 14:37 [IST]


Most of us have a Permanent Account Number (PAN) card, but not many know it's significance. Let's try to understand what actually PAN is.

PAN is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department, to any “person” who applies for it or to whom the department allots the number without an application.

PAN helps the tax department to identify the person's transaction include tax payments, TDS/TCS credits, returns of income/wealth/gift/FBT, specified transactions, correspondence, and so on.

Let's understand what the alpha numeric combinations in a PAN card stand for. Let's say the PAN card number is AFZPK7190K.

• First three characters i.e. “AFZ” in the above PAN are alphabetic series running from AAA to ZZZ
• Fourth character of PAN i.e. “P” in the above PAN represents the status of the PAN holder. “P” stands for Individual, “F” stands for Firm, “C” stands for Company, “H”
• Stands for HUF, “A” stands for AOP, “T” stands for TRUST etc.
• Fifth character i.e. “K” in the above PAN represents first character of the PAN holder’s last name/surname.
• Next four characters i.e. “7190” in the above PAN are sequential number running from 0001 to 9999.
• Last character i.e. “K” in the above PAN is an alphabetic check digit.

Is it necessary to have a PAN?
Yes, it is mandatory to have PAN and quote PAN on challans for any payments due to Income Tax Department and it is also compulsory to quote PAN in all documents pertaining to some of the financial transaction.

How to apply for PAN?
PAN should be applied only on Form 49. It can be downloaded from the website Income Tax Department or UTIISL or NSDL www.incometaxindia.gov.in, www.utiisl.co.in or tin-nsdl.com respctively. This form is also available at IT PAN Service centers and TIN Facilitation centers.

Once can also make changes in PAN or check the status of your PAN online by using the above mentioned sites.

If you already have your PAN and know more about it you can check a website www.https://incometaxindiaefiling.gov.in/portal/knowpan.do. Fill your details and know details of your PAN.

Here is the list of documents required to be submitted as proof of identity and address by individual who is Citizen of India located in India at the time of application for PAN

Proof of Identity
Copy of any of the following:
1 School leaving certificate
2 Matriculation certificate
3 Degree of a recognised educational institution
4 Depository account statement
5 Credit card statement
6 Bank account statement/ bank pass book
7 Water bill
8 Ration card
9 Property tax assessment order
10 Passport
11 Voters Identity Card
12 Driving License
13 Certificate of identity signed by Member of Parliament or Member of Legislative Assembly or Municipal Councilor or Gazetted Officer.

Proof of Address
Copy of any of the following
1 Electricity bill*
2 Telephone bill*
3 Depository account statement*
4 Credit card statement*
5 Bank account statement/bank pass book*
6 Rent receipt*
7 Employer certificate*
8 Passport
9 Voters Identity card
10 Property tax assessment order
11 Driving License
12 Ration card
13 Certificate of address signed by Member of Parliament or Member of Legislative Assembly or Municipal Councilor or Gazetted Officer.

* documents submitted as proof of address for serial numbers 1 to 7 should not be more than six months old from the date of application.

If the applicant is a minor (i.e. below 18 years of age at the time of application), any of the documents as per the lists specified below of any of the parents/ guardian of such minor shall be deemed to be the proof of identity and address of the applicant.