Identifiers · Glossary
PAN (Permanent Account Number)
10-character alphanumeric identifier issued by the Income Tax Department.
PAN is your unique 10-character tax ID issued by the Income Tax Department under Section 139A of the Income Tax Act, 1961. Format: 5 letters + 4 digits + 1 letter. Required for: any taxable financial transaction, opening bank accounts, receiving TDS-deductible payments, filing ITR.
From 1 July 2023, PAN must be linked to Aadhaar under Section 139AA — an inoperative PAN triggers 20% TDS under Section 206AA on every payment until linked. Linking fee: Rs. 1,000 if past the deadline.
Worked example
A freelancer whose PAN went inoperative on 1 Jul 2023 (no Aadhaar link) gets Rs. 20,000 deducted as TDS on a Rs. 1L 194J invoice (20% under 206AA), instead of the normal Rs. 10,000. The extra Rs. 10K is recoverable at ITR — but only after linking PAN-Aadhaar first.
Practitioner tip
Don't share Aadhaar for tax purposes — always use PAN. Aadhaar disclosure to commercial entities is voluntary under the Aadhaar Act, 2016, and increases identity-theft surface area.
Related glossary terms
- GSTIN — 15-character alphanumeric GST registration number assigned to every GST-registered taxpayer.
- Form 26AS — Consolidated annual tax statement showing all TDS, advance tax, and refunds.
More in Identifiers
These definitions are educational. Tax laws change annually — verify with a Chartered Accountant before making GST or income-tax decisions.