PAN Card – Its structure, Logic and relevance

While going through different experiences in my daily routine works , i really got en-devour to experience with the  word “PAN Card” . Every time when i came in contact with the “PAN Card” issues i really gets confused about the logic behind making those stupid alphabets and digits, but when i came to know about its all over material i was so glad to know about such a useful information. So I just want to share those information with all of you :


 

Definition


Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated tamper proof card, by the Income Tax Department of India.

The Permanent Account Number (PAN) is unique to an individual or entity and it is valid across India. Permanent Account Number once allotted to an individual or entity is unaffected by a change of name, address within or across states in India or other factors.

General Use of PAN


Generally, it is used for many other purposes like  opening new bank account, new telephone / mobile phone SIM, purchase of foreign currency. But it is mandatory for filing income tax returns, service tax return and any other challans while tax deduction at source, bank deposits above Rs. 25,000/=, purchase and sale of immovable properties, vehicles etc.

Why & How to obtain PAN ?


Is PAN Card Necessary? Whether Obtaining PAN is optional and voluntary?

While i was in search of these questions i found that PAN card is as compulsory as passport, driving license, Aadhaar etc. However, its use is mandatory at required places, like PAN for high-value financial transactions, Driving License for motor driving, passport for foreign travel etc.

One can apply for PAN by submitting the prescribed PAN application to the authorized PAN agency of the district or thru online submission to NSDL  along with 2 face-photos, ID proof, address proof and fee. In case of Re-print (re-issue), a photocopy of the old PAN is also required. Quoting Aadhaar Number attached with Aadhaar card is optional presently. However, it is recommended to provide Aadhaar letter now, if one has it, so that PAN gets linked to Aadhaar. It will save future effort of Aadhaar linking when it becomes mandatory. It takes about one month to receive the card and is sent by registered India Post.

Fresh PAN


PAN Card is not only for the resident of India. It is also for non-residents. So the criteria limit will be increased to some extent as in case of residents. For resident application should be made on downloaded form-49A and for the non-resident the form 49AA for either at the counter of the authorized PAN agency of the district (use google search for nearest) or thru online application. In case of Online, one needs to print the submitted application, affix 2 face-photos, attach ID proof, address proof and fee of Rs.105/= thru cheque or Demand draft and send by post to NSDL office at — ‘NSDL e-Governance Infrastructure Limited, 5th floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune – 411016’.

Re-print (re-issue)/ data correction of PAN


This is the most important query that i used to have during my works. As the most of the huddles occurs when:

  • I lost my PAN Card
  • My address has been changed
  • While issuing the PAN Card any spelling mistake or any mis-print has been done

So for these queries the answer is quite simple. Just apply PAN for Reprint.

One should only have to give an application on Form-49AE either at the counter of the authorized PAN agency of the district (use google search for nearest) or thru online mode. In case of online, one needs to print the submitted application, affix 2 face-photos, attach ID proof, address proof, photocopy of old PAN and fee of Rs.105/= thru online-banking, cheque or demand draft. Send the completed paper application with attachments by post to NSDL office at — ‘NSDL e-Governance Infrastructure Limited, 5th floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model Colony, Near Deep Bungalow Chowk, Pune – 411016’, India.


 

What if only First name has been written on the PAN form?

When such an issue gets attracted with then the same name will be written twice i.e. the First name will also be the Sur name.

As if : Some one fills the First name as “Rahul” and left blank the middle and Sur name column then, on the face of PAN Card the name will be displaced as “Rahul Rahul”.

Construction of the PAN


Its just a technical issue. I have only found that its only issuing a new series of PAN numbers is based using Phonetic Soundex code algorithm to ensure that each number is unique. The following list is “constant permanent parameters” that assist in the creation of phonetic PAN (PPAN) number:

i. Full name of the taxpayer;

ii. Date of Birth/Date of Incorporation

iii. Status;

iv. Gender in case of individuals; and

v. Father’s name in case of individual (including in the cases of married ladies).

The Date of Issue (DOI) of the PAN card can be found on the right hand side of the photo on your PAN card.

pan1

Logic of PAN CARD 


So, queries and queries leads me to the think about the logic of the PAN Card 10 digit number. Severally, i use to thought why only 10 digit? It might be 11 or any other number.. Why it has 6 alphabets and 4 digits? It might be some other sequences. So, my conclusion point on this queries was nearly at the end when i get to know that its just like:

A typical Permanent Account Number which would look like AACPK7190K.. Its logic is in the sequence as follows:

First three characters i.e. “AAC” in the above PAN are alphabetic series running from AAA to ZZZ.
Fourth character i.e. “P” in the above PAN represents the status of the PAN holder.

“P” stands for Individual.
“F” stands for Firm.
“C” stands for Company.
“H” stands for HUF.
“A” stands for AOP.
“T” stands for TRUST etc.

Fifth character i.e. “K” in the above PAN represents first character of the PAN holder’s last name/surname.
Next four characters i.e. “7190” in the above PAN are sequential number running from 0001 to 9999.
Last character i.e. “K” in the above PAN is an alphabetic check digit.

The New Phonetic PAN (PPAN)


The new Phonetic PAN (PPAN) helps to prevent the allotment of more than one PAN to assesses with the same or similar names. If a matching PPAN is detected, a warning is given to the user and a duplicate PPAN report is generated. In these cases, a new PAN can only be allotted if the Assessing Officer chooses to override the duplicate PPAN detection. Under this new system a unique PAN can be allotted to 17 crore taxpayers.

Having PAN:


· If the applicant has never applied for a PAN, does not have a PAN allotted to them, they can visit the Income Tax Department (ITD) website. The first step is to determine if a PAN has been allotted to them or not.

· If a PAN has not been allotted to them they can apply at the following sites. You can apply and track the progress of your application through both of these websites:

UTI PAN Card Application

NSDL Application for PAN

· To apply in person, use the following lists to find the nearest TIN-PAN Centers,NSDL TIN Facilitation Centers or UTI PAN Application Centers (for UTI, see list at bottom of page).

To apply for a new PAN card you need to submit at least two proofs of Identify and residence from the following sources:

· Matriculation Certificate

· Recognized Educational Institute Degree

· Credit Card

· Bank Statement

· Ration Card

· Driving License

· Voter’s Identity Card

· Passport

(The above list is for individuals and HUF.)

At Conclusion


Usually, a small things makes a great difference, so from depositing the money in bank to submission of annual return a PAN plays a vital role in the corporate world. So  if you do not have a PAN card, take the small amount of time need to apply for one today.

 

 

References:

1. http://anothercommonman.wordpress.com/2012/04/19/logic-to-pan/

2. http://carockers.org/pan-card-facts-logic/

Published by

Shushant ( ICAI Final )

Shushant is a Chartered Accountant student at Institute of Chartered Accountants of India. He is also a Student of Company Secretary at Institute Of Company Secretaries of India. He is a administrator of this site . In his spare time he hang out with his friends and discuss about the current issues in market. You can find his latest blog posts at www.enrollmyexperience.com and at his facebook profile.

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