PAN is 10-digit alphanumeric number which is used as an identity proof. It contains verified information of the cardholder like name, date of birth, father’s/mother’s name etc.
Permanent Account Number (PAN) is a 10-digit alphanumeric number which serves as an identity proof. It is essential during all major financial transactions. With the help of PAN, the Income-Tax department tracks all the financial transactions of an individual in order to ascertain his actual earning. It can be issued to Indian citizens including minors, foreign citizens and non-resident Indians (NRIs).
Lesser known facts of PAN-
1. PAN reveals cardholder’s information
The first three characters in PAN are alphabetic series between. These can be between AAA to ZZZ, selected on a random basis. The fourth character represents the status of the person. Like C for Company, P for Person, F for Firms, T for Trusts, G for Government and so on. The fifth character is the first alphabet of your either surname (in case of Status P) or the name of the entity (in other cases).
Sixth to ninth characters are sequential numbers between 0001 to 9999. These are, too, selected on a random basis. The last character in PAN is an alphabetic check digit. It is generated by applying a formula to the preceding nine letters and numbers.
2. Cardholders can check their PAN issue date-
The cardholder can see on which date PAN was issued by the Income-Tax department. It is mentioned vertically on the lower right side of the card, just next to the cardholder’s photos. The date is mentioned in DDMMYY format.
3. Mentioning the father’s name on PAN is not mandatory
Previously, it was mandatory for the applicant to give their father’s name in the PAN application form. However, as per the new rule which came into effect on December 5, 2018, applicants are free to choose father or mother’s name to be printed on PAN. In case, the applicant’s mother is a single parent, then furnishing father’s name is not mandatory.
4. It’s illegal to carry more than one PAN
Under section 139A of Income-Tax Act, 1961 one PAN per person is allowed. Anyone caught with multiple PAN can face legal action or financial penalty. According to Section 272B of the Income-Tax Act, Rs 10,000 penalty can be levied on possession of two or more PAN. Therefore, it is advisable that if you are two or more PAN, then surrender the additional one.
5. A new tick box for transgenders to apply for PAN
The Central Board of Direct Taxes (CBDT), which is responsible for framing a policy for the department, had earlier issued a notification on April 9 last year, providing a new tick box for transgenders to apply for PAN. It should be noted that the notification, issued under sections 139A and 295 of the Income Tax Act, specifies the new process of application for obtaining PAN number by an individual and includes the new provision for third genders.
6. Apply for PAN by May 31 of next fiscal
Any resident other than an individual such as Hindu Undivided Family (HUF), firm, charitable trusts,etc., who enters into a financial transaction of Rs 2.50 lakh or more in a financial year and has not been allotted any PAN, shall apply for one by May 31 of the next financial year.
7. Dealing into financial transactions worth 2.5 lakh or above; get PAN
Any individual, who is the managing director (MD), director, partner, trustee, author, founder, karta, chief executive officer (CEO), principal officer or office bearer of the entities mentioned or any person competent to act on behalf of such entities, and who has not been allotted any PAN, shall apply for one by May 31 of the financial year following the fiscal in which the specified entities deal into financial transactions worth Rs 2.50 lakh or above.