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Understand your PAN

Understand your PAN:

How much do you know about your PAN? Let’s understand few important things about PAN.

What is PAN?

  • PAN stand for Permanent Account Number.
  • It is a 10 digit alphanumeric number.
  • It is issued by Income Tax Department.

Information on the PAN:

  • Name.
  • Date of Birth / Date of Incorporation.
  • Status (Individual, Company, etc.).
  • Gender.
  • Father’s Name.
  • Date of Issue (On the right hand side of your photo on your PAN Card).

Can I own more than one PAN?

  • NO. It is illegal to own more than one PAN.
  • It is non-transferable. PAN remains same even if there is change in the address. However, you can get the address changed on the same PAN.

PAN Structure:

  • It is a 10 digit alphanumeric number.
  • (AAAPS1111F) First 3 characters are alphabets running from AAA to ZZZ.
  • (AAAPS1111F) Fourth character is alphabet. It represents status of the PAN card holder i.e., C – Company, P – Person (Individual), H – HUF, F – Firm, A – AOP, T – Trust (AOP), B – Body of Individual, L – Local Authority, J – Artificial Juridical Person, G – Government. In our case, we have taken the example of a Person (Individual) .
  • (AAAPS1111F) Fifth character is surname in the case of a person (Individual). In other cases, it is the first name of the entity / company. For example, if individual name is Vijay Sharma then the fifth character will be “S“.
  • (AAAPS1111F) Sixth to ninth characters are numbers running from 0001 to 9999.
  • The last and the tenth character is alphabetic check digit.

Why it is important for the Government?

The PAN is important for Government and Tax Authorities in preventing tax evasion. It is used to link and track various financial transactions. It includes purchase / Sale of Property, Investment / Loans, Credit Card transactions, purchase / sale of valuable items (e.g., Jewellery) and other financial transactions

Is PAN required only for Income Tax Purposes?

It is used for multiple purposes. Apart from Income Tax purposes, it is also used as Identity proof where it is mandatory to mention PAN i.,e Purchase of immovable property, Car, investment / loans, Open a bank account, etc. Now, Landlord’s PAN is also mandatory to claim HRA exemption, if annual rent paid exceeds Rs.100,000.

It is really important to understand your PAN. Make sure that it is kept safely and disclosed only when it is required.

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