Know your PAN Structure Meaning of pan digits(Income Tax Ind

Sumeet Bhardwaj (Sr. Accountant) (861 Points)

01 February 2011  

 

Structure of the new series of PAN : The Permanent Account Number under new series is based on following constant permanent parameters of a taxpayer and uses Phonetic Soundex code algorithm to ensure uniqueness :-
 
i. Full name of the taxpayer;
 
ii. Date of birth / Date of Incorporation;
 
iii. Status;
 
iv. Gender in case of individuals; and
 
v. Father’s name in case of individuals (including in the cases of married ladies)
 
These five fields are called core fields, without which PAN can not be allotted.
 
The PAN under the new series is allotted centrally by a customised application system (IPAN / AIS) for all-India uniqueness. The system automatically generates a 10 character PAN using the information in above five core fields. PAN has the following structure :-
 
Structure of PAN
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The fourth character of the PAN must be one of the following, depending on the type of assesse:

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 — Govt

The fifth character of the PAN is the first character (a) of the surname / last name of the person. In the case of Personal Pan card, where the fourth character is "P" or (b) of the name of the Entity/ Trust/ Society/ Organisation in the case of Company/ HUF/ Firm/ AOP/ BOI/ Local Authority/ Artificial Jurdical Person/ Govt, where the fourth character is "C","H","F","A","T","B","L","J","G".
The phonetic PAN (PPAN) is a new concept which helps prevent allotment of more than one PAN to assessees with same / similar names. AIS works out the PPAN based on some important key fields of an assessee using an internal algorithm. At the time of PAN allotment, the PPAN of the assessee is compared with the PPANs of all the assessees to whom PAN has been allotted all over the nation. If a matching PPAN is detected, a warning is given to the user and a duplicate PPAN report is generated. In such cases, a new PAN can only be allotted if the Assessing Officer chooses to override the duplicate PPAN detection.
 
A unique PAN can be allotted under this system to 17 crore taxpayers under each alphabet under each status (i.e. individual, HUF, Firm, Company, Trusts, Body of Individuals, Association of Persons etc.)
 
Permanent Account Number under new series : Since a taxpayer can make payment of taxes or have monetary transaction anywhere in India, a unique all India taxpayer identification Number is essential for linking and processing transactions / documents relating to a taxpayer on computers, as also for data matching. Therefore, a new series of Permanent Account Number was devised . Section 139A of the Act was amended w.e.f. 1.7.95 to enable allotment of PAN under new series to persons residing in areas notified by the Board. Applications for allotment of PAN under new series was made mandatory in Delhi, Mumbai and Chennai w.e.f. 1.6.96, and in rest of the country w.e.f. 11.2.98.

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Objectives sought : PAN was introduced keeping in view the following objectives :-

i.  to facilitate linking of various documents and information, including payment of taxes, assessment, tax demand, arrears etc. relating to an assessee.

ii.  to facilitate easy retrieval of information.

iii.  to facilitate matching of information relating to investment, raising of loans and other business activities of taxpayers collected through various sources, both internal as well as external, for widening of tax base and detecting and combating tax evasion through non-intrusive means.