What is a Permanent Account Number (PAN) in India?
The 10 characters in a PAN follow a specific logical structure. The sequence begins with a series of three alphabets. The fourth character indicates the category of the PAN holder (e.g., P for Individual, C for Company, F for Firm). The fifth character is particularly important for individuals, as it is the first letter of the holder's surname (or last name); for non-individuals, it's the first letter of the organization's name. This is followed by a sequential series of four numbers and concludes with a final alphabetic check digit.
A PAN is essential for various financial and tax-related activities in India. It is a mandatory requirement for filing Income Tax Returns (ITR) and is used for submitting tax challans and all official correspondence with the Income Tax Department. For entities such as companies, obtaining a PAN is a necessary step during their establishment process, as it is required for all their major financial transactions and compliance.
We provide expert advisory and corporate services across Asia, guiding businesses through complex markets and regulations.