Significance of PAN Card in Financial Transactions

Alphanumeric structure of a PAN card is designed to encode specific information:

• Characters 1 to 5 and the 10th are alphabetic, while the following four are numeric.
  
  
• Initial three alphabetic characters span from AAA to ZZZ, offering a wide range of possibilities.
  
  
• Characters 5 to 9 cover numerical values from 0001 to 9999, allowing for diverse combinations.
  
  
• The final character acts as an alphabetic check digit, ensuring data accuracy.
  
  
• The fourth character designates the holder’s status – “P” for an individual, “T” for Trust, “C” for Company, and so on.
  
  
• The fifth character denotes the last name in the case of an individual, or for non-individuals, the initial letter of the PAN holder’s name.
  
  

This structure helps identify the nature of the PAN holder and distinguishes individuals from various entities based on the encoded characters.

The process for applying for a PAN Card involves submission through two authorized agencies, UTI Infrastructure Technology And Services Limited (UTIITSL) and National Securities Depository Limited (NSDL). These agencies are permitted by the Income Tax Department to process PAN applications, while the allocation of the PAN number remains under the jurisdiction of the Income Tax Department itself. Indian residents utilize Form 49A for PAN applications, while non-residents, including foreign companies, are required to use Form 49AA for the same purpose.