PAN FAQs

PAN (Permanent Account Number) is a unique 10-character alphanumeric number issued by the Income Tax Department to taxpayers in India. It serves as a unique identification number for tax purposes and is used for filing income tax returns, paying taxes, opening bank and investment accounts, and carrying out specified financial transactions in India.

PAN is mandatory for most tax-related compliances in India. It enables the Income Tax Department to track financial transactions, link taxes deducted or collected at source (TDS/TCS), and grant credit for taxes paid. For NRIs, quoting PAN is often required for filing tax returns, claiming tax refunds, purchasing or selling immovable property, and making investments in India.

• First three characters i.e. “AFZ” 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. “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.

It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. From 1 January 2005 it will be mandatory to quote PAN on challans for any payments due to Income Tax Department. It is also compulsory to quote PAN in all documents pertaining to the following financial transactions:-

• sale or purchase of any immovable property valued at five lakh rupees or more;
• sale or purchase of a motor vehicle or vehicle, [the sale or purchase of a motor vehicle or vehicle does not include two wheeled vehicles, inclusive of any detachable
• a time deposit, exceeding fifty thousand rupees, with a banking company;
• a deposit, exceeding fifty thousand rupees, in any account with Post Office
• Savings Bank;
• a contract of a value exceeding one lakh rupees for sale or purchase of securities;
• opening a bank account;
• payment to hotels and restaurants against their bills for an amount exceeding twenty-five thousand rupees at any one time;
• payment in cash for purchase of bank drafts or pay orders or banker’s cheques for an amount aggregating fifty thousand rupees or more during any one day;
• deposit in cash aggregating fifty thousand rupees or more with a bank during any one day;
• payment in cash in connection with travel to any foreign country of an amount exceeding twenty-five thousand rupees at any one time.

No. PAN and TAN serve different purposes and cannot be used interchangeably. PAN identifies taxpayers, whereas TAN identifies persons responsible for deducting or collecting tax at source.

Yes. PAN is mandatory for filing an Income Tax Return (ITR) in India and for claiming tax refunds from the Income Tax Department.

As per the Income-tax Act, PAN may become inoperative if it is not linked with Aadhaar within the prescribed timelines, subject to applicable exceptions. An inoperative PAN can result in difficulties in filing tax returns, claiming refunds, and carrying out specified financial transactions.

Yes. NRIs can apply for and obtain a PAN if they have taxable income in India or are required to undertake financial transactions such as investments, property purchases or sales, or filing tax returns in India.

Yes. PAN is generally required for filing an income tax return and claiming any refund due from the Income Tax Department.

Yes. A PAN is a unique identification number allotted to a taxpayer and remains valid for the lifetime of the holder unless surrendered, cancelled, or held in violation of the law.

Section 160 of IT Act, 1961 provides that a non-resident, a minor, lunatic, idiot, and court of wards and such other persons may be represented through a Representative Assessee. In such cases, application for PAN will be made by the Representative Assessee.

Permanent Account Number (PAN), as the name suggests, is a permanent number and does not change during lifetime of PAN holder. Changing the address or city, though, may change the Assessing Officer. Such changes must, therefore, be intimated to nearest IT PAN Service Center or TIN Facilitation Center for required correction in PAN databases of the Income Tax department. These requests will have to be made in a form for ‘Request For New PAN Card Or/ And Changes In PAN Data.

It takes about 15 days to get a new PAN allotted. However, PAN can be obtained in around 5 days if application is made through Internet and processing fee paid through credit card. It is advisable to initiate action for obtaining PAN will in time.