All about PAN

Permanent Account Number (PAN) is a national identification number, issued to any person who has applied for or to whom department allots the number without application

I am not a tax payer. Do I need to have PAN?

Yes. Your income may not be coming in taxable limit or you may be senior citizen and your children may give money to you. In such case, you may have to make some transactions for which PAN is mandatory. For example:

1. Sale or purchase of any immovable property valued at five lakh rupees or more; 
2. A time deposit, exceeding Rs.50,000, with a banking company ; 
3. A deposit, exceeding Rs.50,000, in any account with Post Office Savings Bank; 
4. Opening a bank account; 
5. Making an application for installation of a telephone connection (including a cellular telephone connection); 
6. Payment in cash for purchase of bank drafts or pay orders or banker’s cheques for an amount aggregating     
7. Rs.50,000 or more during any one day; 
8. Deposit in cash aggregating Rs.50,000 or more with a bank during any one day; 

Why do i need to quote PAN for all the above mentioned transactions?

PAN is used by the department to trace all the transactions made by the individual.It acts as identifier of the person with the department.So department has made it mandatory to quote PAN. 

I have PAN card. But I have not filed Income Tax return.

As long as your income does not move beyond the taxable limit and its for genuine reasons, you need not file IT return even if you have PAN card.But in case , you have income exceeding the limit and you have not filed IT return, there are possibility of getting caught when you do any of the above transactions

How do i identify a PAN number?

The structure of a PAN number is as follows:

AAAPK9999A

The first 3 digits i.e. “AAA” in the above PAN are alphabetic series running from AAA to ZZZ 

Fourth character of PAN 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. “9999” in the above PAN are sequential number running from 0001 to 9999. 

Last character i.e. “A” in the above PAN is an alphabetic check digit.