The Permanent Account Number (PAN) in India is essential for tax purposes and identity verification. Indian residents and entities like companies and firms must apply using Form-49A, while non-residents and foreign entities use Form-49AA. PAN consists of 10 alphanumeric characters, with the first three letters as alphabetic and the fourth denoting the type of assessee (e.g., ‘P’ for individuals, ‘C’ for companies). The fifth character typically reflects the first letter of the assessee’s surname or entity name. Changes in name or details require filing Form-49A without altering the PAN digits. PAN’s tenth digit serves as a checksum for validation. Understanding these basics is crucial for compliance and identity management in India’s tax system.
1. Permanent Account Number (PAN):- If any person wants to apply for a new Permanent Account Number, they must fill out Form-49A.
2. Applicability:-
This form is applicable on Indian Resident & Indian entities:
a. Resident of India
b. Indian companies
c. Indian firms
d. Other entities which is incorporated in India.
For non-resident & entities incorporated outside India they must fill out Form-49AA instead of Form-49A.
3. Classification of PAN:-
PAN card will be issued by authority after filing of Form-49A or Form-49AA. It consists of 10 digits.
Example:ABCPK1234H
a. First five letters of the PAN will be alphabetic.
b. The Next 4 letters of the PAN will be
c. Last digit will be alphabetic.
4. Decoding of PAN:-
a. First three letter have do not represent
b. 4th letter denotes the status of assesse:
- If the assessee is individual then it will be ‘P’.
- If the assessee is Company then it will be ‘C’.
- If the assessee is Trust then it will be ‘T’.
- If the assessee is firm then it will be ‘F’.
- If the assessee is Government then it will be ‘G’.
- If the assessee is Association of person then it will be ‘A’.
- If the assessee is Body of Individual then it will be ‘B’.
- If the assessee is HUF then it will be ‘H’.
- If the assessee is Local authority then it will be ‘L’ etc.
c. 5th letter denotes the first letter of the last name/surname:
- Name of the assessee is Ashish Singla
First name is Ashish
Last name is Singla
5th letter will be ‘S’.
- Name of the assessee is Ashish
Last name is Ashish
5th letter will be ‘A’.
- Name of the assessee is Ashish Kumar Singla
First name is Ashish
Middle name is Kumar
Last name is Singla
5th letter will be ‘S’.
Now, in case assesse is other than individual, 5th letter will be the first letter of the assessee name:
- Name of the assessee is Reliance Industries Ltd.
5th letter will be ‘R’.
In these cases like firm, LLP, Companies etc. 5th letter will be the first character of the name.
d. 6th to 9th letter do not represent anything.
e. 10th digit is check sum digit which is used to validate the correctness of PAN.
5. Change in the name of assessee:-
If any assessee change their name, a new PAN card will be issue by the department but there will be no change in the PAN digits.
All 10 digits will remain same.
Example: Existing name of the company is ABC Ltd.
5th letter will be ‘A’.
*** If this company change its name from ABC Ltd to XYZ Ltd, the 5th letter will remain the same. There will be no change in the digits of PAN in case of change in existing details of PAN.
6. Changes in details of assessee:-
If there is any change in the name, address, mail id, contact number or any other details of the assessee, they need to file Form-49A.
For a new PAN or amendment to an existing PAN, Form-49A will need to be filed.
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Disclaimer: The views expressed are strictly of the author. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation. Author will not accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.
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