Permanent Account Number is basically a method of identifying a taxpayer on the
computer system through a unique All-India number so that all information relating to
that taxpayer, e.g. taxes paid, refunds issued, outstanding arrears, income disclosed,
transactions entered etc. can be linked to him through the computer system. Processing of
return of an assessee or other actions on AST software is not possible unless PAN has
been allotted to him and is linked to the AO code of the Assessing Officer who is trying
to process that return.
The old Series of Permanent Account Number : Earlier the assessees of the Income-tax
Department were identified by their General Index Register (GIR) Number. This was
essentially a manual system. The GIR number was unique only within an Assessing
Officers Ward / Circle and not through out the country. To overcome these shortcomings,
Permanent Account Number (old series) was first introduced in 1972 and made statutory
u/s 139A of the Act w.e.f. 1st April, 1976. Blocks of Permanent Account Numbers were
allotted to each Commissioner Charge by the Board. The Commissioners made the
allotment of Permanent Account Numbers to assessees under various Assessing Officers
in their charge from within the Block allotted to them. Initially the allotment was made
manually. Computerised allotment was introduced through 36 computer centres covering
the entire country in 1985. However, the PAN under old series failed to meet the desired
objectives for following reasons:-
• No database was maintained and there was no check to avoid allotment of multiple
PANs to a taxpayer;
• The data captured under the computerised system was not structured and was limited to
very few parameters – Name, Address, Status and designation of A.O.;
• The allotment of PAN was not centralised – an assessee could apply for allotment of
PAN in different centres and get a distinct PAN from each centre, due to which all India
uniqueness could not be achieved. ;
PAN was not permanent as jurisdiction of the assessee was part of the PAN and,
therefore, was prone to changes with the change in jurisdiction;
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 which took care of the above limitations.
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.
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 nonintrusive
means.
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
hese 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- AAA S A 1234 A
First Three Digit Alphabetic series running from AAA to ZZZ
Fourth Digit Status (I.e. P For Personal, C for Corporate, F for Firm, H for Hindu
Undivided Family Etc.)
Fifth Digit First character of assessee's Last Name/ Surname
Next Digit Sequential Number running from 0001 to 9999
Last Digit Alphabetic Check digit
PAN STRUCTURE
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.)
Jurisdiction :
The Permanent Account Number! Card does not by itself indicate jurisdiction, as
jurisdiction gets changed frequently and is not a permanent information. However, in the
database each PAN is linked to a 10 digit Assessing Officer code indicating the
jurisdiction of the taxpayer. This AO code defines the Chief Commissioner Region, the
Commissioner's Charge, the Joint Commissioner Range, and the place and designation of
the Assessing Officer(s). Any authorised user of the Income Tax Application systems
can, by making a query on any PC on the Income Tax network find out the Assessing
Officer for a given PAN.
Who is required to apply for Permanent Account Number : Under Section 139A(1) of the
Income-tax Act, 1961 following categories of persons are expected to apply and obtain
Permanent Account Number :-
i. Persons who are already assessed or assessable to Income-tax;
ii. Persons who are carrying on any business or profession where total sales / turnover /
gross receipts are or is likely to exceed Rs. 5,00,000/- in any previous years;
iii. Trusts;
iv. Any class or classes of persons by whom tax is payable under the Income-tax Act or
any tax or duty is payable under any other law for the time being in force including
importers and exporters whether any tax is payable by them or not.
The Assessing Officer can also allot Permanent Account Number to any other person by
whom tax is payable. Any other person can also apply to the Assessing Officer for
allotment of a Permanent Account Number. All assessees who had earlier been allotted a
Permanent Account Number were expected to apply for Permanent Account Number
under new series, so that a structured data base COULD be set up in respect of all persons
having Permanent Account Number under new series.
Coverage of PAN :
Permanent Account Number covers individuals, HUF, partnerships, firms, companies,
body of individuals, trusts, and all other persons who are assessable to tax and /or come
under the purview of Section 139A. PAN under the new series is allotted on the basis of
Form 49A filled up by the applicants. Section 139A provides that no person can hold
more than one PAN.
Allotment of PAN
Bulk allotment of PAN in batch process through IPAN : PAN can be allotted in batch
mode using IPAN system centrally through Computer Centres. It can also be allotted online
by Assessing Officers using AIS system from their computers on the network. In
Batch mode, applications in Form 49A for allotment of PAN are received by the
Assessing Officers. After basic verification, these are sent to the Computer Centres where
data is entered on computers using the IPAN application system, and is then transferred
to the National Computer Centre, Delhi through high speed dedicated leased data circuits.
Mandatory quoting of PAN
Under Section 139A (5) (a)/ (b) persons who have been allotted a PAN are required to
quote the same on their returns of income, challans for payment of taxes and all
correspondence with the Income-tax department.
Under Section 139A (5)(c) the Central Board of Direct Taxes has powers to notify
transactions where quoting of PAN would be compulsory. Rule 1 14B specifies the
transactions where quoting of PAN is mandatory by the concerned persons.
computer system through a unique All-India number so that all information relating to
that taxpayer, e.g. taxes paid, refunds issued, outstanding arrears, income disclosed,
transactions entered etc. can be linked to him through the computer system. Processing of
return of an assessee or other actions on AST software is not possible unless PAN has
been allotted to him and is linked to the AO code of the Assessing Officer who is trying
to process that return.
The old Series of Permanent Account Number : Earlier the assessees of the Income-tax
Department were identified by their General Index Register (GIR) Number. This was
essentially a manual system. The GIR number was unique only within an Assessing
Officers Ward / Circle and not through out the country. To overcome these shortcomings,
Permanent Account Number (old series) was first introduced in 1972 and made statutory
u/s 139A of the Act w.e.f. 1st April, 1976. Blocks of Permanent Account Numbers were
allotted to each Commissioner Charge by the Board. The Commissioners made the
allotment of Permanent Account Numbers to assessees under various Assessing Officers
in their charge from within the Block allotted to them. Initially the allotment was made
manually. Computerised allotment was introduced through 36 computer centres covering
the entire country in 1985. However, the PAN under old series failed to meet the desired
objectives for following reasons:-
• No database was maintained and there was no check to avoid allotment of multiple
PANs to a taxpayer;
• The data captured under the computerised system was not structured and was limited to
very few parameters – Name, Address, Status and designation of A.O.;
• The allotment of PAN was not centralised – an assessee could apply for allotment of
PAN in different centres and get a distinct PAN from each centre, due to which all India
uniqueness could not be achieved. ;
PAN was not permanent as jurisdiction of the assessee was part of the PAN and,
therefore, was prone to changes with the change in jurisdiction;
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 which took care of the above limitations.
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.
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 nonintrusive
means.
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
hese 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- AAA S A 1234 A
First Three Digit Alphabetic series running from AAA to ZZZ
Fourth Digit Status (I.e. P For Personal, C for Corporate, F for Firm, H for Hindu
Undivided Family Etc.)
Fifth Digit First character of assessee's Last Name/ Surname
Next Digit Sequential Number running from 0001 to 9999
Last Digit Alphabetic Check digit
PAN STRUCTURE
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.)
Jurisdiction :
The Permanent Account Number! Card does not by itself indicate jurisdiction, as
jurisdiction gets changed frequently and is not a permanent information. However, in the
database each PAN is linked to a 10 digit Assessing Officer code indicating the
jurisdiction of the taxpayer. This AO code defines the Chief Commissioner Region, the
Commissioner's Charge, the Joint Commissioner Range, and the place and designation of
the Assessing Officer(s). Any authorised user of the Income Tax Application systems
can, by making a query on any PC on the Income Tax network find out the Assessing
Officer for a given PAN.
Who is required to apply for Permanent Account Number : Under Section 139A(1) of the
Income-tax Act, 1961 following categories of persons are expected to apply and obtain
Permanent Account Number :-
i. Persons who are already assessed or assessable to Income-tax;
ii. Persons who are carrying on any business or profession where total sales / turnover /
gross receipts are or is likely to exceed Rs. 5,00,000/- in any previous years;
iii. Trusts;
iv. Any class or classes of persons by whom tax is payable under the Income-tax Act or
any tax or duty is payable under any other law for the time being in force including
importers and exporters whether any tax is payable by them or not.
The Assessing Officer can also allot Permanent Account Number to any other person by
whom tax is payable. Any other person can also apply to the Assessing Officer for
allotment of a Permanent Account Number. All assessees who had earlier been allotted a
Permanent Account Number were expected to apply for Permanent Account Number
under new series, so that a structured data base COULD be set up in respect of all persons
having Permanent Account Number under new series.
Coverage of PAN :
Permanent Account Number covers individuals, HUF, partnerships, firms, companies,
body of individuals, trusts, and all other persons who are assessable to tax and /or come
under the purview of Section 139A. PAN under the new series is allotted on the basis of
Form 49A filled up by the applicants. Section 139A provides that no person can hold
more than one PAN.
Allotment of PAN
Bulk allotment of PAN in batch process through IPAN : PAN can be allotted in batch
mode using IPAN system centrally through Computer Centres. It can also be allotted online
by Assessing Officers using AIS system from their computers on the network. In
Batch mode, applications in Form 49A for allotment of PAN are received by the
Assessing Officers. After basic verification, these are sent to the Computer Centres where
data is entered on computers using the IPAN application system, and is then transferred
to the National Computer Centre, Delhi through high speed dedicated leased data circuits.
Mandatory quoting of PAN
Under Section 139A (5) (a)/ (b) persons who have been allotted a PAN are required to
quote the same on their returns of income, challans for payment of taxes and all
correspondence with the Income-tax department.
Under Section 139A (5)(c) the Central Board of Direct Taxes has powers to notify
transactions where quoting of PAN would be compulsory. Rule 1 14B specifies the
transactions where quoting of PAN is mandatory by the concerned persons.
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