PAN card: HUF vs. individual. How the 4th character changes everything for income tax purpose

A PAN card can be issued to a person as well as to a Hindu Undivided Family (HUF). Although both are used for income tax purposes, an individual PAN represents a single person, while an HUF PAN represents a family unit that is treated as a separate legal entity for taxation.

What is an HUF?

The head of the HUF is called the Karta, while the family members are coparceners.

How to identify the difference between an individual and an HUF PAN?

The fourth character of PAN represents the status of the PAN holder (E.g. ALWPG5809L).

• "A" stands for Association of Persons (AoP)
• "B" stands for Body of Individuals (BOI)
• "C" stands for Company
• "F" stands for Firm/Limited Liability Partnership
• "G" stands for Government Agency
• "H" stands for Hindu Undivided Family (HUF)
• "J" stands for Artificial Juridical Person
• "L" stands for Local Authority
• "P" stands for Individual
• "T" stands for Trust

Individual PAN

• Issued to one person for their personal financial and tax-related activities.

• Used for salary, business income, investments, and filing personal ITR.

• Managed and filed by the individual himself/herself.

• Income earned personally is taxed in the individual's name.

• Requires the person’s Aadhaar and other identity/address proofs.

• Assets linked to this PAN belong only to that person.

HUF PAN

• Issued to a Hindu Undivided Family, which is a separate taxable entity.

• Used for income earned from joint family property or family-run business.

• Managed by the Karta, who files the HUF’s income tax return.

• Income belonging to the family is taxed under the HUF, not individuals.

• Requires Aadhaar of Karta and an HUF declaration/affidavit.

• Assets linked to this PAN belong to the entire family as HUF property.

Can an HUF have multiple PANs?

No, an HUF cannot have multiple PAN cards. An HUF is limited to a single PAN. The income tax department tracks them meticulously.

What form is used for the HUF PAN application?

Who manages the HUF PAN?

The 'Karta,' traditionally the senior-most male member, is the one who takes the lead.