Definition
PAN.
Unique 10-digit alphanumeric number for tax purposes.
Statutory Definition
Income Tax Act.
Etymology & Origin
Introduced by the Indian Income Tax Department to bring a universal identification system to prevent tax evasion and track financial transactions centrally.
Full Legal Analysis
A Permanent Account Number (PAN) is a unique 10-digit alphanumeric identity allotted to each taxpayer (individual, company, HUF, etc.) by the Income Tax Department under the supervision of the Central Board of Direct Taxes (CBDT).
PAN serves as a universal identification key linking all transactions of the assessee with the tax department, including tax payments, TDS/TCS credits, returns, and specified high-value transactions like buying a car or property.
Linking PAN with Aadhaar has now been made mandatory for individuals. Failure to link renders the PAN 'inoperative', which means the person cannot file returns, and TDS will be deducted at a higher penal rate (usually 20%).
The Supreme Court upheld the constitutional validity of Section 139AA of the Income Tax Act, which mandated the linking of PAN with Aadhaar to weed out duplicate and fraudulent PAN cards.
Advocates must ensure their clients' PANs are operative before initiating major transactions or tax filings to avoid severe consequences under Section 206AA.
This Term in Indian Statutes
Income Tax Act, 1961, 1961
"Permanent account number to be allotted by the Assessing Officer."
The statutory requirement for obtaining and quoting PAN.
