A permanent account number (PAN) is a ten-character alphanumeric identifier, issued in the form of a laminated “PAN card”, by the Indian Income Tax Department, to any “person” who applies for it or to whom the department allots the number without an application. It can also be obtained in the form of a PDF file.

A PAN is a unique identifier issued to all judicial entities identifiable under the Indian Income Tax Act, 1961. The income tax PAN and its linked card are issued under Section 139A of the Income Tax Act. It is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and it also serves as an important proof of identification.

It is also issued to foreign nationals (such as investors) subject to a valid visa, and hence a PAN card is not acceptable as proof of Indian citizenship. A PAN is necessary for filing income tax returns.

Structure of PAN
The PAN (or PAN number) is a ten-character long alpha-numeric unique identifier.

The PAN structure is as follows: Fourth character [P — Individual or Person ] Example: AAAPZ1234C

The first five characters are letters (in uppercase by default), followed by four numerals, and the last (tenth) character is a letter.
The first three characters of the code are three letters forming a sequence of alphabets letters from AAA to ZZZ
The fourth character identifies the type of holder of the card. Each holder type is uniquely defined by a letter from the list below:
A — Association of persons (AOP)
B — Body of individuals (BOI)
C — Company
F — Firm
G — Government
H — HUF (Hindu undivided family)
L — Local authority
J — Artificial juridical person
P — Person (Individual)
T — Trust (AOP)
The fifth character of the PAN is the first character of either:
of the surname or last name of the person, in the case of a “personal” PAN card, where the fourth character is “P” or
of the name of the entity, trust, society, or organisation in the case of a company/HUF/firm/AOP/trust/BOI/local authority/artificial judicial person/government, where the fourth character is “C”, “H”, “F”, “A”, “T”, “B”, “L”, “J”, “G”.
The last (tenth) character is an alphabetic digit used as a check-sum to verify the validity of that current code.
Provisions
In recent times, the DOI (date of issue) of the PAN card is mentioned at the right (vertical) hand side of the photo on the PAN card if issued by NSDL and will not be mentioned if issued by UTI-TSL.

The central government has introduced a new online service called “Know Your PAN”, to for knowing your PAN number, verify your PAN for new and existing PAN numbers.

Failure to comply with the provisions of Section 139A of Income Tax Act, a penalty of ₹10,000/- for each default is payable u/s.272B to the assessing officer.

Uses of PAN
The primary purpose of the PAN is to bring a universal identification to all financial transactions and to prevent tax evasion by keeping track of monetary transactions, especially those of high-net-worth individuals who can impact the economy.

Quoting the PAN is mandatory when filing income tax returns, tax deduction at source, or any other communication with the Income Tax Department. PAN is also steadily becoming a mandatory document for opening a new bank account, a demat account, a new landline telephone connection / a mobile phone connection, purchase of foreign currency, bank deposits above ₹50,000, purchase and sale of immovable properties, vehicles etc.

Obtaining a PAN
Obtaining a PAN may be optional or voluntary like a passport, driving license, Aadhaar etc. However, its use is mandatory at required places, like PAN for high-value financial transactions, driving license for motor driving, passport for foreign travel etc..

One can apply for PAN by submitting the prescribed PAN application to the authorized PAN agency of the district or through online submission to NSDL Website, UTI along with 2 recent passport size color photographs, proof of ID, Address and Date of Birth and fee. In case of re-print (re-issue), a photocopy of the old PAN is also required. It takes about 10–15 days to receive the card.

A user with an Aadhaar card can also submit e-KYC.

Prescribed PAN application forms
There are two types of PAN applications:

Application for allotment of PAN: This application should be used when the applicant has never applied for a PAN or does not have PAN allotted to him.
FORM 49AA: – To be filled by foreign citizens.
Application for new PAN Card or/and Changes or Corrections in PAN Data: – Those who have already obtained the PAN and wish to obtain the new PAN card or want to make some changes/corrections in their PAN data, are required to submit their applications in the following form prescribed by ITD:
‘REQUEST FOR NEW PAN CARD OR/AND CHANGES OR CORRECTION IN PAN DATA’: – The same form(49A/49AA) can be used by Indian as well as foreign citizens. A new PAN card bearing the same PAN but updated information is issued to the applicant, in such a case.
Pan allotment based on Aadhar is free of cost. pan pdf will be generated and issued to applicant. This is easy and paperless process. Get pan within 10 minutes. Holds same value as Physical pan card.
Pan card allocated date can be checked from official website of UTI.