Courtesy:Gopalan V
Meaning of Numbers on a PAN Card
Just like a credit card or a cheque leaf, the numbers and alphabets on a PAN card too have a significance.
Through this article, we'll understand the meaning of these alphabets and numbers found on a PAN card.
SAMPLE PAN NUMBER
AAPFA3421J
A A P F A 3 4 2 1 J1 2 3 4 5 6 7 8 9 10
Unlike credit cards or cheque leafs, which have only numbers, a PAN Card consists of a 10 digit alphanumeric sequence.
Let's understand what each character of this sequence stands for.
First 3 Characters
The first 3 characters on a PAN card represent an alphabetic series running from AAA to ZZZ.
4th Character
The 4th character represents the status of the PAN holder, which can be one of the following:
- C – Company
- P – Person
- H — HUF (Hindu Undivided Family)
- F — Firm
- A — Association of Persons (AOP)
- T — AOP (Trust)
- B — Body of Individuals (BOI)
- L — Local Authority
- J — Artificial Juridical Person
- G — Government
So, an individual will have the 4th character as P.
5th Character
The fifth character of the PAN is the first letter of:
1 the surname in the case the status is "P", or,
2 the name of the Entity, Trust, Society, Organization, HUF, etc. in all other cases
3 For e.g., an individual with the name Vivek Kumar Shukla will have S as the fifth character.
If you change your surname after marriage or due to any other reason, your PAN card number will remain unchanged.
6th to 9th Characters
The next four numbers are sequential numbers running from 0001 to 9999.
10th Character
The last digit is an alphabetic check digit which is generated by applying a formula to the preceding nine letters and numbers.
Below is a pictorial representation of the above information to easily explain the meaning of numbers on a PAN card:
The importance of Permanent Account Number (PAN) card has grown
over the years, and it is today an essential part of our lives.
The most important purpose of allotting PAN to an entity is for the purpose of identification and to track all the related monetary information of that entity.
Initially, the significance of PAN was for filing income tax returns.
Over time, PAN was used in dealings with the stock markets, banks and purchase of real estate and vehicles.
Today, PAN has started finding use in unconventional areas as well, as follows:
Bank Fixed Deposits:
If you open a fixed deposit with your bank for an
amount exceeding Rs. 50,000, a copy of PAN card needs to be given.
In absence of PAN, the bank will deduct TDS of 20% or at the prevailing rate, whichever is higher (instead of the normal 10%).
Further, the bank will not issue TDS certificate.
Form 15G/15H and other exemption certificates will be invalid in this case.
Payment in Hotels and Restaurants:
You may asked to submit a copy of
your PAN if you pay cash in hotels or restaurants against bills for an amount exceeding Rs. 25,000
Payment to Travel Agents:
Cash payment more than Rs. 25,000 for
travel to any foreign country (fare or purchase of foreign currency) in a
single payment requires you to produce your PAN copy
Rental Agreements:
Nowadays, landlords demand a copy of the PANcard of tenants, as the primary ID proof, while letting out their property.
Jewellery shops:
High-value purchase of jewellery in cash should beaccompanied by a copy of the PAN card of the buyer, mainly as a means to curb black money usage.
Other usages of PAN include:
Payment in Second Hand Car Dealings
Installation of Telephone
Visa Facilitation Centres
It is seen that quoting or producing a copy of your PAN card iscompulsory in practically every money transaction, and not restricted to Income Tax dealings.
The significance of PAN cannot be questioned as this has become the primary document sought in all important legitimate dealings.
Do NRIs require PAN Card?
As PAN is required for any financial transaction in India, an NRI will need to have a PAN card if he has an income in India and has to file returns, if he wishes to invest in India, when he carries out banking transactions, if he purchases real estate or for any transaction mentioned above.
Beware of PAN Frauds:
The increasing importance of PAN has increased the likeliness of PAN Card identity theft.
The safeguarding of the physical copy of the PAN card no longer assures that your card is not being misused.
As a majority of transactions demand a photocopy of your PAN card, or simply quoting the Permanent Account Number, it is very easy for your information to be
misused for high ticket purchases or benami property transactions.
A copy of your PAN card or simply its number can be quoted in transactions, which you are not even a part of.
Example of how your information can be misused:
Recently, a consumer activist group revealed that the PAN card copy used in Railway ticket Tatkal bookings were misused by several jewellers. When an individual produces his PAN to book the Tatkal
tickets, this information is fed in the Indian Railways system and also displayed on the ticket, reservation chart and train coaches.
Unscrupulous jewellers steal this information from such public displays and use it to furnish tax collected details while they sell jewellery of very high value to high-net worth individuals who do not wish to produce their PAN.
If this happens to you?
When your PAN card is illegally used, you may not even be aware of this for atleast 6 months after the wrong transaction. You can check for such benami transactions by going through your Form 26AS, which is a consolidated statement of tax deducted, along with other details.
If you are a non-tax paying PAN card holder, you may not even be able to check this form.
The Income Tax department will require the PAN cardholder to prove that the transaction was not carried out by him, and also give details on his source of funds.
This becomes very difficult and time-consuming.
As a PAN card holder, you should take care while disclosingyour PAN details to anyone.
You must hand over only signedphotocopies and try to reduce using PAN in allcasual transactions as ID proof.
Phonetic PAN (PPAN):
The phonetic PAN (PPAN) is a new concept introduced to prevent a single PAN being allotted to more than one assessee with same or similar names.
When PAN is allotted, the PPAN of the assessee is compared with the PPANs of all the assessees to whom PAN has been allotted in the country.
A warning is sounded off if a matching PPAN is detected.
A duplicate PPAN report is then generated.
A new PPAN can be allotted only if the Assessing Officer overrides this duplicate PPAN detection.
Thus the PPAN is a key document today and even takes predominance over your name as far as the tax authorities are concerned.
