INCOME TAX DEPARTMENT Permanent Account Number ABCDE1234F NAME NAKUL FINANCIAL BASICS What is a PAN Card? India's most essential 10-digit financial identity
Financial Basics

What is a PAN Card? — Every Indian Needs to Know This

Applying for a loan, opening a bank account, or making any transaction above ₹50,000 — none of it happens without a PAN card. Yet most people don't fully understand how it actually works.

NV
Nakul Verma
Founder, Moneyed · 16 Years in Loan Advisory
July 13, 2025 7 min read
Key Points
  • PAN stands for Permanent Account Number — a unique 10-character code issued by the Income Tax Department
  • PAN is mandatory for any loan — no bank will lend without it
  • The government uses your PAN to track all significant financial transactions
  • Applying online costs just ₹107 and takes 15–20 working days
  • Every Indian citizen can have only one PAN — holding a duplicate is illegal

If you've ever applied for a loan or opened a bank account, one document has been asked of you every single time — your PAN card.

Many people think of it as something only needed for filing income tax returns. But the truth is that your PAN card is your financial identity — without it, you practically don't exist within India's formal financial system.

What is a PAN Card?

PAN stands for Permanent Account Number. It's a 10-character alphanumeric code issued by India's Income Tax Department. The card itself is a physical plastic card — similar to your Aadhaar card or driving licence.

Those 10 characters aren't random. They encode specific information:

PositionCharactersMeaning
1–3AAA–ZZZCode of the issuing Income Tax Office
4thP, C, H, F, A, T, B, L, J, GType of PAN holder (P = Person, C = Company)
5thFirst letter of surnameFor individuals only — surname initial
6–90001–9999Sequential number
10thA–ZCheck digit (computer-generated)

Example: In ABCPV1234F, the 4th character "P" means Person, and "V" means the surname starts with V.

Why is a PAN Card Essential?

The Income Tax Department created PAN to track who earns what, who invests what, and who transacts what. But it has since evolved far beyond taxation. It is now your complete financial identity in India.

Loan applications — Home loan, personal loan, car loan, business loan — PAN is mandatory across the board. Banks use it to pull your CIBIL report.
Opening a bank account — Required when depositing more than ₹50,000 in cash, or when opening a new account.
Mutual funds and investments — SEBI mandates that any investment above ₹50,000 requires a valid PAN.
Property purchase or sale — PAN is mandatory for both parties in any property transaction above ₹10 lakh.
Income Tax Return filing — ITR cannot be filed without a PAN.
Credit cards — Every bank verifies your PAN before issuing a credit card.

How to Apply for a PAN Card

Applying for a PAN is now much simpler than it used to be. There are two main routes:

1
NSDL (National Securities Depository Ltd.)
Website: onlineservices.nsdl.com/paam/endUserRegisterContact.html
Fill Form 49A (for Indian citizens). Upload required documents. Pay ₹107 online. Your PAN arrives in 15–20 working days.
2
UTIITSL (UTI Infrastructure Technology and Services Ltd.)
Website: myutiitsl.com
Same process as NSDL. Both portals are government-authorised — you can use either one.
3
Instant e-PAN (via Aadhaar)
If you have an Aadhaar card with a linked mobile number, you can get a free instant e-PAN from the Income Tax portal in under 10 minutes. It won't be a physical card, but it is digitally valid for all purposes.

Documents Required

Document TypeAccepted Options
Identity ProofAadhaar, Passport, Voter ID, Driving Licence
Address ProofAadhaar, Bank Statement, Electricity Bill, Ration Card
Date of Birth ProofBirth Certificate, 10th Marksheet, Aadhaar
Photo2 passport-size photos (for physical application)
Fee₹107 (Indian address) / ₹1,017 (foreign address)

PAN Card and Loans — The Direct Connection

When you apply for a loan at any bank or NBFC, the very first step is verifying your PAN. Using your PAN, the bank:

1
Pulls your credit report from CIBIL or another bureau — seeing all your existing loans, payment history, and credit score.
2
Verifies your declared income against Income Tax records — checking your ITR filings.
3
Checks for existing loans across other banks — your entire borrowing footprint is visible through your PAN.

This is why keeping your PAN card valid and active is critical. If your PAN is incorrect or inactive, your loan application will be rejected before the CIBIL check even begins.

Important: Holding more than one PAN card is illegal and can attract a penalty of up to ₹10,000. If you accidentally have two PANs, you must surrender the duplicate through the Income Tax portal.
Disclaimer: This article is for educational purposes only. For official PAN card information, visit the Income Tax Department's website at incometax.gov.in. Moneyed Finance is a loan advisory firm, not a bank or government authority.

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