What is a PAN number?
number, also known as the permanent account
number has become an essential, though not
compulsory document to have in India. It can be
closely considered quite similar to the Social
Security Number or SSN issued in USA (United
States of America). Both are personal
identification codes issued by their respective
Government organization for the ease of tracking
and maintaining financial and other related
There are a
number of similarities as well as differences
between the PAN number issued in India and the
SSN issued in America.
These are as follows:
The PAN is a
ten digit alphanumeric code, which is unique for
every individual. On the other hand, the SSN is
a nine digit personal identification number.
The PAN is
issued by the department of income tax,
government of India. The SSN is issued by the
Social Security Administration of USA.
Both the SSN
and the PAN serve as important and accepted
proof of identification.
compulsory for every citizen of USA to have SSN.
Previously, children above 14 years of age were
bound to obtain it. Currently, the law has been
modified and children of USA should have their
SSN within the first year of their life.
In India, it is not compulsory for everybody to
obtain PAN. However, it is compulsory for
everybody who files an income tax return in the
country. Even if you do not have taxable income,
you can obtain PAN. Finally, minors may or may
not have a PAN card, depending on their income.
The SSN is
the single most important personal
identification tool used in the USA. You will
have to supply it for every activity – whether
you buy a property, get insurance, take out a
mortgage or enroll in a college.
The SSN was primarily created to keep track of
the financial activities of individuals, but it
has now evolved into personal identification
number. The PAN is also created for the same
purpose and it too is well on its way to
becoming a universally accepted personal
identification, though the process is not yet
complete. You will have to quote your PAN number
for a wide variety of transactions like buying
and selling immovable property, buying a car,
setting up a demat account or making deposits
exceeding Rs. 50000.00 in bank or post office.
security code is issued to all American
individuals. Non citizens and temporary foreign
workers are given special categories of SSN. In
India, PAN is issued to all Indians who apply
for it. It is also compulsory for the NRI to
have PAN if he wants to carry on financial
activities in India.
The SSN is
only issued to individuals. However, PAN is
issued to individuals as well as financial
organizations like companies and trusts which
carry on transactions in the country.
It is illegal
for a person to have more than one SSN and it is
illegal for a person to have more than one PAN.
From the above comparison, we can say that
the SSN seems to be a mature version of the PAN.
Keeping in mind the growing importance of PAN,
it will probably be made mandatory for all in
the coming years and it will begin to serve the
same function as SSN.
At present, the PAN is an important document
necessary for many transactions, be it making a
large deposit or obtaining a land line
connection. It is also widely accepted form of
photo identity. So, it can be expected that PAN
will play a key role similar to SSN in near