Meaning of Permanent Account Number (PAN)

What is Permanent Account Number (PAN)

 

This post explains about Permanent Account Number (PAN).

PAN

Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department, to any "person" who applies for it or to whom the department allots the number without an application.

PAN enables the department to link all transactions of the "person" with the department. These transactions include tax payments, TDS/TCS credits, returns of income/wealth/gift/FBT, specified transactions, correspondence, and so on. PAN, thus, acts as an identifier for the "person" with the tax department.

PAN was introduced to facilitate linking of various documents, including payment of taxes, assessment, tax demand, tax arrears etc. relating to an assesse, to facilitate easy retrieval of information and 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 detecting and combating tax evasion and widening of tax base.

Evolution of PAN in India

ü  Prior to 1972, a tax-payer (assesse) of the Income tax Department was identified by a number called General Index Register Number (GIR No.).

ü  Permanent Account Number (old series) was introduced in 1972.

ü  Allotment of Permanent Account Number was made statutory u/s.139A of the Income-tax Act, 1961 w.e.f. 1st April, 1976. 2

ü  Blocks of Permanent Account Number were allotted to each Commissioner of Income-tax Charge by the Board. The Commissioners of Income-tax made the allotment of Permanent Account Numbers to assess under various Assessing Officers in his charge from within the Block of PAN allotted to him.

ü  This was allotted manually till 1985.

ü  This series was abandoned in 1995.

ü  Allotment of current series of PAN was started in 1995 after studying the system of identification number initiated in U.K. (National Insurance Number), USA (Social Security Number), Spain (Fiscal Identification Number), Australia (Tax File Number) etc.

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