Quick Summary
PAN is a unique 10-digit alphanumeric code issued by the Income Tax Department to track financial transactions and tax payments.
A Permanent Account Number (PAN) is a ten-character alphanumeric identifier issued by the Income Tax Department, under the Central Board of Direct Taxes (CBDT), to every taxpayer in India. It works as a unique, lifelong tax identity that ties all of a person's or entity's financial dealings — income tax returns, tax payments, TDS credits and high-value transactions — to a single record, regardless of any change of address or assessing officer.
Structure of the number
The format is five letters, four digits and a final letter (for example, ABCPK1234F). The fourth character shows the holder's category — P for an individual, C for a company, H for a Hindu Undivided Family, F for a firm, A for an association of persons, T for a trust — while the fifth is the first letter of the surname or entity name. The last character is an alphabetic check digit.
Legal basis and issuing authority
PAN is governed by Section 262 (the old Section 139A) of the Income-tax Act, 2025, read with Rule 114. Applications are made in Form 49A (Indian citizens and entities) or Form 49AA (foreign applicants) through the authorised agencies Protean eGov (formerly NSDL) and UTIITSL. Under Section 262(6) (the old Section 139AA), PAN must be linked with Aadhaar, failing which it becomes inoperative. The CBDT's PAN 2.0 project is now upgrading PAN into a QR-coded common business identifier on a single digital portal, without invalidating existing numbers.
Where PAN is mandatory
- Filing income tax returns and paying tax
- Opening a bank or demat account and applying for a credit card
- Specified high-value transactions listed under Rule 114B, such as property, vehicles, large cash deposits and big-ticket purchases
Key Points
- 10-character alphanumeric code
- Issued by Income Tax Department
- Mandatory for tax filing
- Required for opening bank accounts
- Needed for high-value transactions