Irrespective of the fact whether you are an Indian or an NRI, you need to have PAN card if you have financial transactions or are filing taxes in India. PAN or Permanent Account Number is a ten-digit alphanumeric number that is issued by the Indian Income Tax Department. Notably, it is illegal to hold more than one PAN. Every alphabet and number in the PAN number is a unique number that has its significance. So, it is important to know your PAN to understand its structure completely.
But let’s first discuss the use of PAN.
Use of PAN
The primary purpose of PAN is to bring an identification key factor that tracks all the information related to financial transactions and taxes. Such as business loans, buying and selling real estate, investments, etc. Read on to know your PAN structure.
Understanding the PAN Card Structure
The structure of the PAN is based on Phonetic Soundex code algorithm. It makes sure that every alphabet or number is unique. The following are the parameters that help in creating PAN number:
- Name of the applicant
- Date of Birth/ date of the incorporation of the company
- Gender (in case of individuals)
- Father’s name (in case of individuals)
Notably, PAN is a permanent number which remains unaffected by the change of address and is not transferable. And the Date of Issue (DOI) of the PAN is found on the right-hand side of the PAN Card.
Alphanumerical Sequence of PAN
The following is the breakdown of the 10-digit alphanumerical sequence of PAN:
- The first five characters are the alphabetical core fields. The first three alphabets are running from AAA to ZZZ. The fourth character can be C (Company), P (Person), H (Hindu Undivided Family), F (Firm), A (Association of Persons), A (trust), B (Body of Individuals), L (Local Authority), J (Artificial Juridical Person), or G (Govt.).
- The fifth character is the first alphabet of the surname, in case of an individual. Or the first letter of the name of the Entity, Society, Trust, etc.
- The next four characters are digits, sequencing from 0001 to 9999.
- The last digit is an alphabetic check digit.
It can be said that PAN card is very important for financial transactions in India. If you have don’t have PAN Card, you can apply for it now, by clicking here. And if there is wrong information added in your PAN, you can fill PAN correction form to get it rectified.