The Permanent Account Number is a fundamental requirement for anyone in India to file a return with the Income Tax Department or even engage in some form of economic or financial transaction. Offices, agencies, firms, and companies will require from the individual or entity to quote or show his or her PAN Card for identification purposes and for linking any of the taxpayer’s economic and financial activities to his taxpayer record in a national database. The PAN Card contains a variety of identifying information. However, one very important piece of information is the 10-digit string of characters printed on the front face of the card. Here is what those digits mean.
General String of Digits
The string of 10 characters on the PAN Card is specifically formulated to follow a certain pattern while allowing for the validation and authentication of a taxpayer’s identity and credentials. The way in which these 10 characters are grouped provide invaluable information about the authenticity and legality of the information contained on the card as being exact duplicates of the ones in the ITD database. The string of digits follows the general pattern of ‘ABC-D-E-0123-X’ to give you 5 different pieces of information.
The First 3 Digits
The first group of 3 digits is composed of letters in the alphabet. While this trio of letters doesn’t actually have any invaluable information to show, it will come in handy in the determination of the last digit in the PAN string.
The 4th Digit
This reflects the cardholder’s classification as a taxpayer. As there are only 10 classifications of taxpayers as per the Income Tax Act of India, then you can only expect any of these letters to appear on the 4th digit of the PAN.
- A is for Association of Persons (AOP)
- B is for Body of Individuals (BOI)
- C is for Companies
- F is for Firms
- G is for Undivided Hindu Families (UHF)
- J is for Artificial Judicial Persons (AJP)
- L is for Local authorities (LA)
- P is for Persons or Individuals
- T is for Association of Persons for a Trust (APT)
The 5th Digit
This is representation of the first letter of the surname of the cardholder or the officially registered name of a business or firm.
The 6th to 9th Digits
Like the first 3 digits in the PAN, the 6th to 9th digits are clustered as a combination of numbers between 0 and 9. The 4-number combination is system-generated and will play an important role in the determination of the last digit in the PAN.
The 10th Digit
This doesn’t hold any personal significance to the cardholder, yet it holds one of the keys to maintaining the security of the PAN. To come up with the last letter in the PAN, the first 9 digits will be run in an algorithm to produce the 10th letter. As such, it is not randomly generated but rather the result of a complex mathematical computation.
When combined as a 10-digit string, your Permanent Account Number is an important instrument in establishing and validating your identity. More importantly, it is proof that you’re contributing to Indian society.