PAN (Permanent Account Number): Definition, Meaning & Guide for Indian Businesses

PAN is the 10-character alphanumeric ID assigned by the Income Tax Department to every taxpayer in India. Required for most financial transactions.

What is PAN (Permanent Account Number)?

PAN (Permanent Account Number) is a 10-character alphanumeric code issued by the Income Tax Department of India. Every individual or entity that pays tax in India needs a PAN. The fourth character indicates the type of holder (P for individual, C for company, H for HUF, F for firm, T for trust, etc.). PAN is mandatory for filing income tax returns, opening bank accounts, large cash deposits (above ₹50,000), purchasing property, vehicles, jewellery, and many other transactions. Linking PAN with Aadhaar is mandatory; unlinked PANs are deactivated. Quote your PAN whenever asked by financial institutions or payers (to avoid 20 percent TDS under Section 206AA).