Know Your PAN Card..!!!!

Hello Friends,

We like to share few important things about PAN..!!

Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department. PAN is basically a method of identifying a taxpayer on the computer system through a unique All-India number so that all information relating to that  taxpayer, (E.g. taxes  paid, refunds  issued, outstanding arrears, income disclosed, transactions entered, status etc.) can be linked to him through the computer system.

Earlier the assesses of the Income-tax Department were identified by their General Index Register(GIR) Number. This was essentially a manual system. The GIR number was unique only within an Assessing Officers Ward / Circle and not through out the country. To overcome these shortcomings, PAN (old series) was first introduced in 1972 and made statutory u/s 139A of the Act w.e.f. 1st April, 1976.

Usefulness of PAN: 

·         To facilitate linking of various documents and information, including payment of taxes, assessment, tax demand, arrears etc. relating to an assessee.

·         To facilitate matching of information relating to investment, raising of loans and other business activities of taxpayers collected through various sources, both internal as well as external, for widening of tax base and detecting and combating tax evasion through non- intrusive means.

·         To facilitate easy retrieval of information.

New series of PAN & its structure:

The PAN under new series is based on following constant permanent parameters of a taxpayer and uses Phonetic Soundex code algorithm to ensure uniqueness :-

1.                   Full name of the taxpayer

2.                   Date of birth/Date of Incorporation

3.                   Status

4.                   Gender in case of individuals and

5.                   Father's name in case of individuals (including in the cases of married ladies)

These five fields are called core fields, without which PAN can not be allotted.

The system automatically generates a 10 character PAN using the information in above five core fields.

Normally we can see the PAN as AAA S A 1234 A

The alphabets indicates as follows:

• First Three Digit Alphabetic series running from AAA to ZZZ
• Fourth Digit- Status

In fourth digit, we can find these alphabets which indicates as follows:

• P-Person
• C- Company
• F-Firm
• H-Hindu Undivided Family
• J- Artificial Judicial Person
• L- Local bodies or authorities
• A- Association of Person
• T- Trust
• B- Body of Individuals
• G - Government

·         In fifth digit first character of assessee's Last Name/Surname

·         Next Digit Sequential Number running from 0001 to 9999

·         Last Digit will be an Alphabet.

Who can apply for PAN?

Under Section 139A(1) of the Income-tax Act, 1961 following categories of persons are expected to apply and obtain PAN:

• Persons who are already assessed or assessable to Income-tax
• Persons who are carrying on any business or profession where total sales/turnover/gross receipts are or is likely to exceed Rs. 5,00,000 in any previous years
• Trusts
• Any class or classes of persons by whom tax is payable under the Income-tax Act or any tax or duty is payable under any other law for the time being in force including importers and exporters whether any tax is payable by them or not.

PAN under the new series is allotted on the basis of Form 49A filled up by the applicants. Section 139A provides that no person can hold more than one PAN. (Obtaining or possessing more than one PAN is against the law)

 Following is the format of PAN:

We felt this information will be useful, So we are sharing with you.. So hope you enjoyed by reading our first post in our first blog..!!