| PAN – Permanent Account Number|
The Income Tax Department issues a PAN card containing a unique 10-digit PAN (Permanent Account Number). The PAN acts as an identity proof of an individual or entity for various purposes. All tax-related information of a person is recorded against that person’s PAN.
PAN is a unique 10-digit alphanumeric character, while the PAN card is a physical or digital card containing the PAN and other important information about the person.
As per the new format of PAN cards introduced by the Income Tax Department on 1 January 2017, all PAN cards will contain a Quick Response (QR) code carrying the cardholder’s details. This code can also be used for data verification. It will also contain the cardholder’s name, father’s name, date of birth, and signature.
Structure of Permanent Account Number (PAN)
It is a 10-digit alphanumeric number and each character represents distinct information of the cardholder.
The first 3 letters – These are purely alphabetical in nature and contain three-letter of the alphabet from A to Z.
The 4 letter – The fourth letter is an alphabet that represents the category of the taxpayer. The various entities and their respective characters are as follows:
- A – Association of Persons
- B – Body of Individuals
- C – Company
- F – Firms
- G – Government
- H – Hindu Undivided Family
- L – Local Authority
- J – Artificial Judicial Person
- P – Individual
- T – Association of Persons for a Trust
The 5 letter – The fifth letter is the first letter of the individual’s surname
The next 4 letters – The next 4 characters are purely numerical in nature and are numbers between 0-9.
The last letter – The last one letter is an alphabet.
| TAN |
A TAN (Tax Deduction and Collection Account Number) is a ten-digit alphanumeric number issued by the Income Tax (IT) department to all persons responsible for collecting or deducting tax. Under Section 203A of the Income Tax Act, 1961, it is compulsory to quote TAN on all TDS or TCS returns.
| Importance of TAN Number |
Any person required to obtain a TAN will face difficulty filing tax returns when he/she does not apply for it. Failure to quote the TAN number in returns or documents will result in a penalty of Rs.10,000. TAN should be quoted in the following documents:
- TCS or TDS statements/returns.
- Challans for TDS or TCS payments.
- Submission of TCS or TDS certificates.
- Collection or submission of a wide variety of IT-related forms.
| Importance of TAN Number |
The TAN, being a ten-digit alphanumeric number, has a unique structure. The structure of TAN is as follows:
- The first four digits are letters – First three letters represent the jurisdiction where the TAN is issued. The fourth letter is initial of the entity or individual applying for the TAN.
- The next five digits are numerical – The numerical in the middle are unique numbers generated by the system.
- The last digit is a letter at the end – The last one letter is a unique letter generated by the system.