• Search the Web

Personal Finance Basics-Know About Your PAN Card

4 min read

The Income-tax department issues you a PAN card. It is not just an identity proof. The Income Tax department of India provides it to every income taxpayer. A PAN card has been made mandatory for the majority of financial transactions. One can notice a lack of awareness about PAN number.

Let us go through a few noteworthy points to know about your PAN card.

Does the PAN Carry any Meaning?

Have you ever wondered why the PAN number is an alphanumeric code? Is this a random code or it has any meaning?

PAN Card

Having a PAN card makes your life easier

Well, this code has a significant meaning, and each alphabet and numbers stand for a particular reason. Just having a PAN card in the pocket is not essential, it is also important to remember what it means and what is its requirement?. 

This article briefly describes the five noteworthy point’s one needs to know about the PAN card.

PAN Card is not proof of Indian Citizenship

Unknown about the details of a PAN card, some people understand the PAN card only as an identity proof given by the government.

know about your PAN card

Know the hidden coding in your PAN card

PAN stands for Permanent Account Number and is issued to every taxpayer by the Income-tax department of India.  It is required for making any finance-related transaction wherever it is needed. 

Many might not know that PAN is also issued to the NRI’s or the foreign nationals similar to the foreign investors. Therefore, one should not confuse it with proof of Indian citizenship. 

The PAN number is a 10-digits code comprising of figures and characters. This 10-character alphanumeric identifier is unique for every taxpayer and valid for the life period, throughout India. 

The PAN is primarily issued to prevent any tax evasion by keeping the check over the monetary transactions. It provides a universal identification for all financial transactions. 

The government of India has mandated the PAN for processes such as opening a new bank account, buying and selling the assets with the cost above five lacs and many others. Due to this reason, the government has taken adequate steps to make the PAN readily accessible through the NSDL online portal and by making the price comparatively much low. 

A Few Facts about PAN

The numbering or coding system of a PAN is unique and not known to many people. Taking an example of a hypothetical alphanumeric PAN number such as BZZPA0061H, let’s understand the details of the coding in a PAN. 

The first five letters in code are always alphabets with the next four as digits followed by a character again. Every character and number has its significance. The complete number can be understood by segregating the code into five groups. 

PAN Code Groups

The first group comprising of the first three characters, the second group includes the fourth character; the third group has the fifth character, the fourth group contain the next four digits and the fifth group having the tenth character.

The starting the characters of the PAN are the regular alphabetical series. These could be any of the characters from AAA to ZZZ. Like in the example above the three characters are BZZ

The fourth character in the PAN number signifies the status of the PAN holder. The status of the PAN holder describes whether it is a firm, an individual, a trust or others.

While making deals, people usually tend to look for this character to understand the status of the PAN cardholder. Hence, it forms the most compelling character in the PAN. The character code and the significance are enlisted below for clarity.

C – Stands for a Company

P – Signifies a Person

H – Stands for Hindu Undivided Family

F – Means a Firm

A – Stands for an Association of Persons

T – Stands for a Trust

B – Signifies the body of Individuals

L – Represents the Local Authority

J – Accounts for an Artificial Juridical Person

G – Stands for the Government

The following fifth character has a unique significance. It associates the name of the holder with the code. This alphabet is taken from the last name of the owner. The first letter or character of the last name or the surname of the PAN holder is considered. 

For the example above, i.e. BZZPA0061H, the fifth character is A, which means the surname starts with A. For instance, Aditi Arora. 

The later four letters in the PAN are the digits. These are the series of number beginning from 0001 to 9999.

The last Alphabet also Carries Meaning

The last one in the PAN card comes to an alphabet. This alphabet has an essential role. It is the alphabetic check digit.

The Bottom Line

It is a nice idea to understand the coding in a PAN to avoid any fraud that may happen with you. One need not mug up the code per se, however, awareness about it is beneficial.

Vande Mataram

Comments are closed.

  • Delight