Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in theform  of  a  laminated  card,  by  the  Income  Tax  Department,  to  any  “person”  who applies for it or to whom the department allots the number without an application.  

PAN  enables  the  department  to  link  all  transactions  of  the  “person”  with  the department.  These  transactions  include  tax  payments,  TDS/TCS  credits,  returns  of income/wealth/gift/FBT,  specified  transactions,  correspondence,  and  so  on.  PAN, thus, acts as an identifier for the “person” with the tax department.  

Explained example of PAN
A typical PAN is AFZ P K 7190 K
  • 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.