PAN & TAN
PAN structure, holder types, PAN-Aadhaar link, and TAN for TDS.
Key facts
- PAN is 10 characters: 5 letters, 4 digits, 1 letter (e.g. ABCPK1234L). The 4th letter is the holder type and the 5th is the first letter of the surname (for individuals) or of the name (for others).
- PAN 4th character: P individual, C company, H HUF, F firm or LLP, A association of persons, T trust, B body of individuals, L local authority, J artificial juridical person, G government.
- An individual's PAN must be linked with Aadhaar; an unlinked PAN becomes inoperative, which means higher TDS/TCS and no refunds.
- TAN is 10 characters: 4 letters, 5 digits, 1 letter (e.g. DELA12345B). The first 3 letters are the jurisdiction code and the 4th is the first letter of the deductor's name.
- Anyone deducting or collecting tax at source needs a TAN, except individuals deducting on property, rent (above the limit) or contract payments using a challan-cum-statement.
- Without the payee's PAN, TDS is at 20% (or the normal rate, if higher) under the Income-tax Act, 2025.
Common questions
How do I read a PAN?
Take ABCPK1234L: the first three letters are a series, the 4th letter (P) shows the holder type (P = individual, C = company, F = firm/LLP, H = HUF, T = trust), the 5th letter (K) is the first letter of the surname or name, then 4 digits and a check letter.
What does F in the 4th letter of PAN mean?
F means a firm or LLP. C is a company, P an individual, H a HUF, A an AOP, T a trust, B a BOI, L a local authority, J an artificial juridical person and G a government body.
What is TAN and who needs it?
TAN (Tax Deduction and Collection Account Number) is a 10-character number every deductor or collector must quote in TDS/TCS payments, returns and certificates. Individuals paying for property, rent or contracts under the challan-cum-statement route don't need one.
What happens if PAN is not linked with Aadhaar?
The PAN becomes inoperative: TDS and TCS apply at higher rates, refunds are withheld, and some transactions are blocked until it is linked (with a fee).
What is the TDS rate if there is no PAN?
20%, or the normal rate if that is higher. For salary, the average rate or 20%, whichever is higher.