Permanent Account Number (PAN), popularly known as Pan Card, 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 enables the department to link all transactions of the “person” with the Department like tax payments, TDS/TCS credits, returns of Income / wealth/ gift/ FBT (fringe benefit tax), specified transactions, correspondence, etc. Thus, it acts as an identification number for the “person” with the tax department.
It facilitates easy retrieval of information and matching of information relating to investment, raising of loans and other business activities of taxpayers.
A typical PAN is APRPH6719D.
First three characters i.e. “APR” 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. “H” in the above PAN represents first character of the PAN holder’s last name/surname.
Next four characters i.e. “6719” in the above PAN are sequential number running from 0001 to 9999.
Last character i.e. “D” in the above PAN is an alphabetic check digit.
It is mandatory to quote PAN on return of income and all correspondence with any income tax authority. It is also compulsory to quote PAN in following financial transactions: -
(a) Sale or purchase of any immovable property valued at five lakh rupees or more.
(b) sale or purchase of a motor vehicle or vehicle, [the sale or purchase of a motor vehicle or vehicle does not include two wheeled vehicles, inclusive of any detachable sidecar having an extra wheel, attached to the motor vehicle;]
(c) A time deposit, exceeding fifty thousand rupees, with a banking company.
(d) A deposit, exceeding fifty thousand rupees, in any account with Post Office Savings Bank.
(e) A contract of a value exceeding one lakh rupees for sale or purchase of securities.
(f) Opening a bank account.
(g) Making an application for installation of a telephone connection (including a cellular telephone connection);
(h) Payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time.
(i) payment in cash for purchase of bank drafts or pay orders or banker’s cheques for an amount aggregating fifty thousand rupees or more during any one day.
(j) Deposit in cash aggregating fifty thousand rupees or more with a bank during any one day.
(k) Payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time.
You can apply for new PAN card online also.
Mobile Based Banking and Other Modes of Digital Payments Class 8