WHAT IS PAN:-
PAN stands for Permanent Account Number. PAN is a ten-digit unique alphanumeric number issued by the Income Tax Department. PAN is issued in the form of a laminated plastic card (commonly known as PAN card). Given below is an illustrative PAN: ALWPG5809L
WHY DEPARTMENT NEEDS PAN:-
PAN enables the department to link all transactions of the assesse with the department. These transactions include tax payments, TDS/TCS credits, returns of income, specified transactions, correspondence and so on. It facilitates easy retrieval of information of assesse and matching of various investments, borrowings and other business activities of assesse
Why PAN has unique identity:-
Pan is a ten-digit unique alphanumeric number issued by the income tax department. The formation of pan is discussed below:
- Out of the first five characters, the first three characters represent the alphabetic series running from AAA to ZZZ.
- The fourth character of pan represents the status of the pan holder
- Fifth character of pan represents the first character of the pan holder's last name/surname in case of an individual. In case of non-individual pan holders fifth character represents the first character of pan holder's name
- Next four characters are sequential numbers running from 0001 to 9999
- Last character,i.e., the tenth character is an alphabetic check digit
The combination of all the above items gives the pan its unique identity.
Benefits of PAN:-
A permanent account number has been made compulsory for every transaction with the income-tax department. It is also mandatory for numerous other financial transactions such as opening of bank accounts, availing of institutional financial credits, purchase of high-end consumer items, foreign travel, transaction of immovable properties, dealing in securities, etc. A PAN Card is a valuable means of photo identification accepted by all government and non-government institutions in the country.
Can i file return without PAN:-
It is mandatory to quote PAN on the return of income. Apart from return of income, PAN is also to be quoted in all challans for making payment of tax, correspondence with the income tax department, etc.