In the modern world of finance and taxation, a Permanent Account Number (PAN) serves as a unique identifier that links individuals and entities to their financial transactions.

Introduced by the Indian government, PAN has become a fundamental element in various financial processes, enabling effective tax administration and promoting financial transparency.

Understanding PAN

A Permanent Account Number (PAN) is a ten-character alphanumeric identifier issued by the Indian Income Tax Department under the supervision of the Central Board of Direct Taxes (CBDT).

Introduced in 1972, PAN was primarily intended to serve as a tool for tracking taxable economic transactions and preventing tax evasion.

Structure of PAN

  1. First five characters (AAA): These represent the surname or name of the PAN cardholder. In the case of companies, the first three characters represent the company’s name.
  2. Next four characters (PL12): This alphanumeric sequence is a random combination and does not convey any specific information.
  3. Last character (C): The last character is an alphabetic check digit that is automatically generated based on the previous nine characters. It helps verify the validity of the PAN.

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