PAN

PAN (Permanent Account Number) is a ten-character tax identity number from the income tax department. It is required for most financial transactions, including investing in a fund.

What PAN is, and what it looks like

A PAN is a ten-character code made of letters and numbers, printed on a small card with your name, date of birth and photo. It never changes, which is why it is called permanent, and each person should have only one. It is the single thread that ties all your financial activity to your tax record.

Where you need it

You need a PAN to open a bank account, open a demat account, invest in mutual funds, buy or sell property above a limit, and file your income tax return. Banks and fund houses quote your PAN when they report large transactions and any TDS to the tax department, which is how the system knows the income is yours.

PAN and Aadhaar

PAN is your tax identity; Aadhaar is your identity number from UIDAI. They are different documents, but most people are required to link the two. An unlinked PAN can become inoperative, which blocks investing and can mean tax is deducted at a higher rate, so it is worth checking that yours is linked.

Keep it safe

Because PAN sits at the centre of your finances, treat the number with care. Share it only where it is genuinely required, and be wary of anyone asking for a photo of your PAN card out of context, as it can be misused to open accounts in your name. To see where it fits in filing, read how to file your income tax return.