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Direct and Indirect Taxation · PAN

Permanent Account Number: Meaning and 10-Character Structure

Updated 10 October 2026 · Fact-checked

A Permanent Account Number (PAN) is a 10-character alphanumeric code issued by the Income-tax Department to identify a taxpayer uniquely. Format: five letters, four digits, one letter (AAAAA9999A). The fourth letter shows the holder's status, the fifth usually the first letter of surname or name, and the last is a check letter.

Understand Permanent Account Number: Meaning and Structure

A PAN is a unique identification number given to a person by the Income-tax Department. It stays the same for life, even if you change your address or city. That is why it is called permanent. One person should hold only one PAN.

The PAN links all your tax records: tax paid, TDS credits, returns filed and high-value transactions. Without a single identifier, the department could not match these. This is why the Income-tax Act, 2025 requires specified persons to obtain a PAN and quote it on returns, challans and certain transactions. The detailed rules on who must apply and when are in the related topics on PAN.

The PAN has 10 characters: letters and digits in the pattern AAAAA9999A. The first three characters are letters, an alphabetic series chosen by the department. The fourth character tells you the type of holder. The fifth character is linked to the name. The next four are digits forming a sequential number. The last is an alphabetic check character.

The fourth character is the one examiners like. P means Individual (Person), C Company, H HUF, F Firm (including LLP), A Association of Persons (other than a trust), B Body of Individuals, L Local authority, J Artificial Juridical Person, G Government, T Trust. Keep A and T separate: A is for an association of persons that is not a trust, and T is for a trust. Learn these as a list.

The fifth character is the first letter of the holder's surname for an individual (P). For other holders it is the first letter of the name of the entity. Example: PAN ABCPK1234D belongs to an individual whose surname starts with K.

Key rules to remember

PAN format
AAAAA9999A = 5 letters + 4 digits + 1 letter (10 characters)
Letters are capital English alphabets. Total length is always 10.
Characters 1 to 3
Three letters
An alphabetic series assigned by the department. Carries no personal meaning.
Character 4 (holder status)
P = Individual; C = Company; H = HUF; F = Firm/LLP; A = AOP (non-trust); B = BOI; L = Local authority; J = Artificial juridical person; G = Government; T = Trust
Memorise this list. It is the most tested part of the structure.
Character 5
First letter of surname (individual) or of name (other holders)
For P-type PANs it is the surname, not the first name.
Characters 6 to 9
Four digits
A sequential number. Do not read personal meaning into it.
Character 10
One alphabetic check character
Allotted by the department. It helps catch errors in the number.

How to solve Permanent Account Number: Meaning and Structure questions

Use this method for any question that asks you to read, validate or explain a PAN.

  1. 1Count the characters. A valid PAN has exactly 10.
  2. 2Check the pattern: first five letters, next four digits, last one letter. Any other pattern is invalid.
  3. 3Read the fourth character and state the holder's status from the list.
  4. 4Read the fifth character. For a P-type PAN, match it with the first letter of the surname. For others, match it with the first letter of the entity name.
  5. 5Note the digits as a sequential number and the last letter as the check character. Do not invent meanings for them.
  6. 6Link your answer to purpose: PAN is a unique, permanent identifier used to track a person's tax records.
  7. 7State your conclusion in one line, such as 'valid PAN of a company' or 'invalid, fourth character cannot be this status'.

Quickest way: Read the PAN in three glances

When to use it: Use in MCQs that give a PAN number and ask about holder type or validity.

  1. Glance 1: length 10 and pattern 5 letters, 4 digits, 1 letter.
  2. Glance 2: fourth character gives the status.
  3. Glance 3: fifth character gives the name initial. Pick the option that fits all three and ignore the rest.

Common mistakes in Permanent Account Number: Meaning and Structure

  • Saying the first letter of the PAN is the first letter of the holder's name.

    It feels natural that a code starts with the name.

    Fix: The fifth character carries the name initial. The first three are a department series.

  • Using the first name initial for the fifth character of an individual PAN.

    Students think of how they write their own name.

    Fix: For individuals the fifth character is the first letter of the surname.

  • Reading the fourth character as the fifth or counting positions wrongly.

    Rushing through the string.

    Fix: Number each character 1 to 10 with your pencil before answering.

  • Treating the PAN as changing when the holder moves to another state.

    Confusion with GST registration, which is state-wise.

    Fix: PAN is permanent and single for a person across India. Only the address record is updated.

  • Confusing F (Firm) with C (Company) or T (Trust) with A (AOP).

    Letters are memorised loosely.

    Fix: Learn the list as a set with a memory aid such as P-C-H-F-A-B-L-J-G-T and test it daily.

  • Assigning personal meaning to digits 6 to 9 or the last letter.

    Wanting every character to mean something.

    Fix: The digits are a sequential number and the last letter is a check character. Say only that.

Worked examples

Example 1

A PAN is ABCPS4521K. Identify the holder type and what the fifth character shows. Is the format valid?

Show the solution
  1. Count: A-B-C-P-S-4-5-2-1-K gives 10 characters.
  2. Pattern: ABCPS are 5 letters, 4521 are 4 digits, K is a letter. Format is valid.
  3. Fourth character is P, so the holder is an individual.
  4. Fifth character is S, so the individual's surname starts with S.
  5. Characters 6 to 9 (4521) are a sequential number and K is the check character.

Answer: Valid PAN of an individual whose surname begins with S.

Example 2

A PAN is AAKCT5623M. What does its structure indicate about the holder? Assume the holder is the fictitious company Tara Steels Private Limited.

Show the solution
  1. Count: 10 characters. Pattern is 5 letters (AAKCT), 4 digits (5623), 1 letter (M). Format is valid.
  2. Fourth character is C, which stands for a company.
  3. Fifth character is T, which fits an entity whose name begins with T, such as Tara Steels Private Limited.
  4. Digits 5623 and the last letter M are the sequential number and check character. They tell you nothing about the name.
  5. Structure alone cannot prove that the PAN belongs to a named entity. It only shows whether the structure is consistent.

Answer: The structure indicates a valid PAN of a company whose name begins with T. It is consistent with Tara Steels Private Limited, but the structure cannot confirm ownership.

Exam tips

  • Memorise the fourth-character list. It is the usual MCQ target.
  • In MCQs, check the fifth character against the surname for P-type PANs. Options often differ only here.
  • In written answers, state the format, then the meaning of characters 4 and 5, then the purpose of PAN. This earns step marks.
  • Use the Income-tax Act, 2025 as the governing law in your answer. Do not cite the 1961 Act.
  • Do not quote section numbers unless you are sure of them. Describe the rule in words.

Practice questions from PAN

Permanent Account Number: Meaning and Structure in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Permanent Account Number: Meaning and Structure: frequently asked questions

What is a PAN under the Income-tax Act, 2025?

It is a unique 10-character alphanumeric number allotted by the Income-tax Department to a person. It identifies the person for tax purposes and stays the same for life.

What does each character of a PAN mean?

The first three are a letter series, the fourth shows holder status, the fifth is the name initial, characters 6 to 9 are a sequential number, and the tenth is an alphabetic check character.

Which letter in a PAN shows that the holder is an individual?

The fourth character is P for an individual. C stands for company, H for HUF and F for firm.

Can one person hold more than one PAN?

No. A person should have only one PAN. It is meant to be a single identifier across all tax records.