What is PAN (Permanent Account Number)?

A Permanent Account Number (PAN) is the unique taxpayer identification number issued by Nepal's Inland Revenue Department (IRD) to identify a person or entity within the national tax system. In Nepali it is the स्थायी लेखा नम्बर (sthayi lekha number). It is the single reference number that links all of a taxpayer's records — income-tax returns, withholding (TDS) statements, VAT and excise filings, refunds and correspondence — to one identity, so that the tax administration can match transactions, payments and returns to the correct person or business.

A PAN is most commonly described as a nine-digit number, and once allotted it is permanent: it does not expire and the number assigned to a taxpayer does not change over time, even if the taxpayer's address, business name or occupation changes. There are broadly two categories. A personal (individual) PAN is for people who earn income — salaried employees, freelancers and consultants, landlords earning rent, and Non-Resident Nepalis with Nepal-source income. A business PAN is for registered entities such as sole proprietorships, partnerships, private and public limited companies, and NGOs. A single person can hold both at once: an individual PAN for their own income and a separate business PAN for a firm they own.

Beyond filing taxes, a PAN has become a routine prerequisite for participating in the formal economy. It is required to issue tax invoices, to receive salary above the basic exemption threshold, to open or operate business bank accounts, to bid in government tenders, to carry out import/export, and it is frequently demanded for property and land registration, vehicle ownership transfers, loan applications and larger financial transactions. In effect the PAN functions as Nepal's general-purpose tax identity, the gateway between informal activity and recognised, documented business.

Worked example — a salaried employee. Suppose an employee is hired on an annual salary that exceeds the basic income-tax exemption threshold (for example, the single-taxpayer threshold of NPR 500,000 used in recent fiscal years). Before the employer can pay that salary in a way the tax law recognises, the employee must have a personal PAN. The employer deducts Tax Deducted at Source (TDS) from the salary under Chapter 17 of the Income Tax Act and deposits it with the IRD against the employee's PAN; the TDS certificate the employer issues quotes that PAN. At year-end, the employee's annual return is filed under the same PAN, and the TDS already deposited is credited against the final liability. Without the employee's PAN this reconciliation cannot happen — which is why, since the 2019-20 fiscal year, salary paid to a worker who has no PAN is treated as an inadmissible (non-deductible) expense for the employer.

Worked example — a business. A trader registering a sole proprietorship obtains a business PAN at registration. Every tax invoice the business issues, and every VAT or income-tax return it files, carries that PAN. When the firm later crosses the VAT registration thresholds, it registers for VAT on top of the existing PAN rather than receiving an unrelated number, so the PAN remains the anchor identity. When the firm bids for a government contract, applies for a business loan, or imports goods, the PAN is quoted on the paperwork and used by counterparties and banks to verify that it is a registered, tax-compliant entity.

Verification and lookup. Because the PAN is the canonical taxpayer identity, third parties — banks, suppliers, government offices — routinely check it. The IRD provides a PAN search (स्था.ले.नं खोजी) e-service on its taxpayer systems so that a PAN can be looked up and the registered name confirmed, which helps prevent the use of false or borrowed numbers on invoices and tenders.

The PAN is created and governed by the Income Tax Act, 2058 (2002), Nepal's consolidating direct-tax statute, and is administered by the Inland Revenue Department under the Ministry of Finance. The core provision is Section 78 of the Act, headed 'Permanent Account Number'. Its operative text states that the Department shall issue an identity number called a permanent account number to any person for the purpose of identifying that person, subject to the Act, and it empowers the Department to require any person to quote their PAN on income returns, statements and other documents used for the purposes of the Act, and the Government of Nepal to specify situations in which the number must be stated.

The obligation to obtain a PAN attaches broadly to every person carrying on a business, every employer of taxable employees, every withholding agent under the Act, and every person required to file an income-tax return; failure to register within the prescribed time can attract penalties under the Act's penalty provisions. A landmark widening of the net came with the budget and Finance Act for fiscal year 2076/77 (2019-20), effective from the start of that fiscal year (Shrawan 2076, i.e. mid-July 2019), which in practice made a PAN mandatory for all salaried workers by making PAN-less salary payments non-deductible for employers. This pulled large numbers of ordinary employees, who previously had no direct dealing with the tax office, into the PAN system.

Administration has steadily moved online. PAN registration is handled through the IRD Taxpayer Portal and, more recently, through the government's Nagarik App, as well as in person at Inland Revenue / taxpayer service offices. The IRD has also moved to link the PAN with Nepal's National Identity (Rastriya Parichaya Patra) system, reflecting a wider push to integrate the PAN with the national ID and digitise taxpayer onboarding.

Registration for a PAN is free — the IRD charges no government fee for issuing a PAN, whether the application is made online or in person. This is a deliberate low-barrier design intended to maximise voluntary registration and formalisation.

The documents required depend on the type of PAN. For an individual PAN, the applicant typically needs a copy of their citizenship certificate (and, for a foreign national, the passport of their country), a passport-size photograph, proof of address, and a working mobile number for one-time-password verification. For a business PAN, the firm generally needs its business registration certificate, the company memorandum/partnership deed (notarised in the case of companies and partnerships), the citizenship certificates of the proprietor(s) or directors, and proof of the office address.

The process is usually completed through the IRD Taxpayer Portal (taxpayerportal.ird.gov.np): the applicant submits the online form, then completes identity verification at a tax office, after which the PAN certificate is issued — commonly within a few working days, and same-day in some in-person cases. Once issued, the PAN should be quoted on returns, invoices and the documents the law specifies, and kept for the life of the taxpayer or entity, since it never changes.

PAN vs VAT registration. A PAN is the base taxpayer identity that every business and most income-earners must have; VAT registration is an additional registration required only once turnover crosses the VAT thresholds. A VAT-registered business still operates under its existing PAN — VAT is layered on top, not a separate replacement number. Conversely, having a PAN does not by itself mean a business charges VAT.

PAN vs TDS. TDS (Tax Deducted at Source) is a method of collecting income tax — the payer withholds tax at the moment of payment and deposits it with the IRD. The PAN is the identifier against which that withheld tax is recorded and later credited; the two work together but are not the same thing. PAN is also sometimes referred to as a TIN (Taxpayer Identification Number); in Nepal's system the PAN serves as the taxpayer identification number.

Nepal's PAN vs India's PAN. The names are identical but the systems are separate. India's PAN, issued by its Income Tax Department, is a ten-character alphanumeric code; Nepal's PAN, issued by the IRD, is commonly a nine-digit number and is governed entirely by Nepali law. A Nepali PAN is valid only within Nepal's tax system. Finally, the PAN should not be confused with the National Identity Number (Rastriya Parichaya Patra) — although the IRD now links the two, they remain distinct identifiers serving different purposes.