What is a PAN card

Visakh Vijayan
3 min readApr 22, 2024

PAN or Permanent Account Number is a unique 10-digit alphanumeric identity card issued to residing Indians by the Income Tax department. The sole purpose of the card is to track financial transactions in the country. Transactions above a certain limit (2 lakhs currently) are required to attach the PAN card number while transacting. This helps in keeping track of money flowing and also prevents tax evasion.


The PAN card was introduced in 1972 under section 139A of the IT Act, of 1961. During the initial years, it was not mandatory. But post-1976, it was made so. Mr. S.K. Das, who was the then Chief Commissioner of Income Tax was the first person to receive a PAN card.

Where is it needed

The PAN is needed while opening bank accounts, and investing in financial instruments like Fixed Deposits, Mutual Funds, etc, trading stocks, etc. At the end of each financial year (which runs from April to March), every citizen has to file their tax returns. During this, the IT department checks if the reported income and the actual income differs. If there is a significant difference the citizen is sent a notice to clarify the same. This is again possible as the citizen files returns against their PAN card.

How Banks Help

The banks are required to provide the PAN card details to the IT department instead of citizens directly providing this. Each bank is required to send a quarterly or monthly report with all transactions that have happened through it along with the citizen’s details. So the IT department is connected to the citizens via the banks. The banks are required to report all types of transactions be it online or cash. Along with this credit card transactions or even loan repayments etc are also reported. The banks usually have secure channels to report this to the IT department and usually involves handing over Form61A.

IT Located

The IT department is headquartered in Delhi with regional and local offices in each state making the process seamless.


Any person above the age of 18 can apply for a PAN card. Minors (below 18) also have PAN cards via their parents. The minors need PAN cards if they have scholarship money coming in or wealth being inherited etc. The NSDL is the institution via which a citizen can apply for a PAN card. The citizen has to provide age and address proofs for the same. Unlike ATM cards, the PAN cards don’t have any expiration date. They charge a fee of Rs. 50 for the same and the PAN is delivered via Post.

Companies on the other hand have an added number called TAN or Tax Deduction and Collection Account Number. This number is used to keep track of the salaries paid out to the employees. Using this number the IT department deducts the TDS for salaried employees. The normal PAN card number is used to keep track of the company’s transactions.

The Number

The PAN is an alphanumeric number in the form <AAA>P<A><0000><A>. The first three letters are random numbers. The fourth letter is a P for Personal or C for Company. The 5th letter is the first letter of the surname of the user.


To prevent a citizen from having multiple PAN cards, the PAN cards are linked to Aadhaar cards which have biometric authentication. Since biometrics are unique that makes the PAN unique as well.

So that is how India can keep track of all the money flowing through it. Pretty neat.



Visakh Vijayan

Techie from Kerala, India. Days are for coding, nights for weaving tales of tech, travel, and finance. Join me in exploring this multifaceted journey