Number - PAN
ten digit alphanumeric number issued by Income Tax Department of India)
here to know- How to apply
Permanent Account Number - a ten
digit Alpha-numeric number commonly called as PAN
is basically our identity with the Income Tax Department. PAN is the
medium through Income Tax department
connects various transactions to a person or persons.
Its important to understand how PAN machanism works?
department has made disclosure of PAN compulsory in most of high value
transactions. When PAN is disclosed, the transaction is
automatically linked to that PAN holder and can easily be traced by
authorities. This way Government tries to establish genuine and tax
transactions. Making PAN mandatory in different transactions is
ultimately to control the flow of undisclosed
money to some
from being mandatory, PAN also works as an identity
proof and as a Date of Birth proof (DOB) at most of the places.
With systems being automated now facility of generating E-PAN for existing PAN holders has been introduced.
Another very convenient option of Instant PAN
also available on e-filing portal of Income Tax for fresh PAN
applicants. For valid AADHAR holders with updated mobile number,
instant PAN will be a very quick and no cost option.
know what these 10 digits of our PAN represent ?
Lets dig out deeper to understand about what these ten alphanumeric
characters of our PAN represent.
to link PAN with AADHAR. How to link PAN & AADHAR Read in
Lets take an example of PAN
belonging to Mr. Rajeev Kumar
- First three characters - AFP are
just randomly picked alphabetic characters.
- Fourth character in a PAN tells us about the
status of the PAN holder-
- P - Individual
- F - Firm
- H - HUF(Hindu Undivided Family)
- C - Company
- A - AOP (Assosiation of Persons)
- T - Trust
- So here P - individual, which
means Mr. Rajeev Kumar is an individual.
- Fifth Character K is the first character of the
PAN holder's surname here it is Kumar.
- Now the four numbers are randomly picked numbers
- The last tenth character is an alphabet which
is called a check digit
Try to relate your PAN -fourth and Fifth character with above
description, You will really find it interesting.
Who should/must have
PAN card is must for following:
- Any person who is required to file Income Tax
businessman or professional where their total sales or gross receipts
are expected to be more then Rs. 5.00 lacs in a financial year
- Any person entering in a transaction where
quoting of PAN is mandatory(explained below)
should I have PAN?
114B of Income Tax Rules specifies the transactions and their monetary
limit for quoting Permanent Account Number)
- From 01/04/2018 any entity not being an individual
must quote PAN while entering any financial transaction of Rs. 250000
Its also important to understand about the transactions where we
are required to
quote PAN. It is compulsory to quote PAN in the documents related to
- It is mandatory to quote PAN while filing your
Income Tax returns
- PAN is must for availing TDS/TCS
- It is mandatory to quote PAN at the time of
Income Tax payments
- It is also compulsory to quote PAN at the time
of entering in any of the following transactions:
- Sale or purchase of immovable property of Rs.
5 lacs or more
- Sale or purchase of a motor vehicle (not a
- A fixed Deposit with Bank exceeding Rs. 50000
- A deposit exceeding Rs. 50000 with Post
Office Savings Account
- Sale or purchase of securities exceeding Rs.
- At the time of opening a Bank Account
- At the time of getting a phone
connection(including cell phone connection)
- Payment to hotels/restaurants at one go of an
amount exceeding Rs. 50000
- Payment at the time of getting a bank draft
of Rs. 50000 or more
- Making a bank deposit of Rs. 50000 or more in a
- Cash payment for foreign travel of an amount
exceeding Rs. 50000
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