A PAN is issued by the Income Tax Department to individuals, companies, firms, trusts and other taxpayers. It is needed to file income tax returns, for TDS and TCS, to open a bank account, for many large transactions, and for GST registration.
How it is built
A PAN looks like AABCP1234Q: five letters, four digits and a letter.
- The fourth character shows the type of holder: P for an individual, C for a company, F for a firm, H for a Hindu undivided family, T for a trust.
- The fifth is the first letter of the surname or of the entity's name.
- The last is a check letter.
Where it shows up in business
- Characters 3 to 12 of every GSTIN are the PAN, so all GST registrations of one business share it.
- TDS deducted on a payment is credited to the payee's PAN. A missing or wrong PAN usually means TDS at a higher rate.
- Udyam registration uses the business's PAN to pull turnover and investment data.
The Income-tax Act, 2025, in force from 1 April 2026, keeps the PAN system. Individuals must have PAN linked to Aadhaar; an unlinked PAN can be treated as inoperative (as of October 2026).