Permanent Account Number or PAN acts as an identification proof for tax payers in India. It is a 10 digit alphanumeric value which is unique for every Indian citizen carrying it. PAN is issued under the Section 139A of the income-tax act.
As announced by the government, PAN Cards are mandatory various purposes in the country like applying for a new bank account, paying bills exceeding Rs. 50,000 and while paying income taxes. It is also required while purchasing property costing a sum more than Rs.10, 00,000.
PAN Cards are also essential for hopeful business firm owners in the country. This is due to the fact that various investments and payments in bulk are required while being the owner of an organization.
Foreigners hoping to start business firms India must also apply for PAN Cards as announced by the government. No matter which country the particular individual is from, the same transaction laws apply on him/her as they do on people with Indian origin and citizenship.
The laws seem strict however; creating a PAN is fairly easy in India. Here’s how.
How is Permanent Account Number Made?
With reference to the above points, Permanent Account number or PAN is an alphanumeric code containing 10 characters. “ARLPA0061H” is a suitable example of a PAN. Although PAN seems like random characters given to the user, they do have a unique meaning.
The first 5 characters of PAN are always letters followed by 4 numbers followed by another character in the end.
The first 3 characters of PAN are in a sequence of letters from AAA to ZZZ. The fourth character indicates the type of PAN holder. Below is the demonstrated visual of how the fourth character is decided for PAN Card requesters.
- A: AOP
- B: Body of Individuals
- C: Company
- F: Firm
- G: Government
- H: Hindu Undivided Family
- L: Local Authority
- J: Artificial Juridical Person
- P: Individual
- T: Trust
- K: Krish
At the fifth position, the first character of your surname (in the case of individual) or the first character of firm, company, etc., (in the case of non-individuals) is used.
The next 4 numeric characters are random numbers and the last character of PAN is the alphabetic check digit.
So, this is how PAN is structured.
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