Financial services

Permanent account number :

contact: BALAMURALI.S BCOM MBA @ 9994870684

This article is about Permanent Account Number. PAN -Permanent Account Number (PAN) is a national identification number, issued to all taxpayers of India whose income is taxable. This number is issued by the Indian Income Tax Department under the auspices of the Central Board for Direct Taxes (CBDT).


This number is compulsory for many activities such as opening a bank account, getting a phone line (discontinued), receiving salary or professional fees. The primary purpose of PAN is to prevent tax evasion by keeping a track of monetary transactions. The PAN is unique, national, and permanent. It is unaffected by a change of address, even between states.


This number can be considered to be similar to Social security number issued in United States to citizens and other legal residents.


Structure and validation:


PAN structure is as follows: AAAAA9999A: First five characters are letters, next 4 numerals, last character letter


Each assesseee is uniquely identified by the PAN


If the PAN does not follow the above structure, then the PAN will be shown invalid


The fourth character of the PAN must be one of the following, depending on the type of assessee:
C — Company
P — Person
H — Hindu Undivided Family (HUF)
F — Firm
A — Association of Persons (AOP)
T — AOP (Trust)
B — Body of Individuals (BOI)
L — Local Authority
J — Artificial Juridical Person
G — Govt


The fifth character of the PAN is the first character in the surname of the person to whom the PAN belongs.
Permanent Account Number is an identity document/number which can also be issued to non-taxpayers.



Demat account :

In India, a demat account, the abbreviation for dematerialised account, is a type of banking account which dematerializes paper-based physical stock shares. The dematerialised account is used to avoid holding physical shares: the shares are bought and sold through a stock broker.

This account is popular in India. The Securities and Exchange Board of India (SEBI) mandates a demat account for share trading above 500 shares. As of April 2006, it became mandatory that any person holding a demat account should possess a Permanent Account Number (PAN),

1.Fill demat request form (DRF) (obtained from a depository participant or DP with whom your depository account is opened).

2.Deface the share certificate(s) you want to dematerialise by writing across Surrendered for dematerialisation.

3.Submit the DRF & share certificate(s) to DP. DP would forward them to the issuer / their R&T Agent.

4.ter dematerialisation, your depository account with your DP, would be credited with the dematerialised securities.

The Benefits :

- A safe and convenient way to hold securities;- Immediate transfer of securities;- No stamp duty on transfer of securities;- Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc.;- Reduction in paperwork involved in transfer of securities;- Reduction in transaction cost;- No odd lot problem, even one share can be sold;- Nomination facility;- Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately;- Transmission of securities is done by DP eliminating correspondence with companies;- Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc.- Holding investments in equity and debt instruments in a single account.

Required Documents :

The extent of documentation required to open a demat account may vary according to your relationship with the institution. If you plan to open a demat account with a bank, a savings, current and, or other account for which the holder has been issued a check book, such holder has an edge over the non-account holder. In fact, banks usually offer additional incentives to customers who open a demat account with them. Along with the application form, your photographs (with co-applicants) and proof of identity/residence/date of birth have to be submitted. The DPs also ask for a DP-client agreement to be executed on non-judicial stamp paper. Here is a broad list:
- A cancelled check, preferably MICR- Proof of Identification- Proof of Address- Proof of PAN card (mandatory)- Recent photographs, one and/or more

For proof of identification and, or address self-attested facsimile copies of PAN card, Voter’s ID, Passport, Ration card, Driver’s license, Photo credit card, Employee ID card, Bank attestation, latest IT returns and, or latest Electricity/Landline phone bill are sufficient. While they only ask for photocopies of the documents, they will need the originals for verification.

Stock market:

A stock market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.

The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008. The total world derivatives market has been estimated at about $791 trillion face or nominal value,11 times the size of the entire world economy. The value of the derivatives market, because it is stated in terms of notional values, cannot be directly compared to a stock or a fixed income security, which traditionally refers to an actual value.Moreover, the vast majority of derivatives 'cancel' each other out (i.e., a derivative 'bet' on an event occurring is offset by a comparable derivative 'bet' on the event not occurring.). Many such relatively illiquid securities are valued as marked to model, rather than an actual market price.

The stocks are listed and traded on stock exchanges which are entities of a corporation or mutual organization specialized in the business of bringing buyers and sellers of the organizations to a listing of stocks and securities together. The stock market in the United States includes the trading of all securities listed on the NYSE Euronext, the NASDAQ, the Amex, as well as on the many regional exchanges, e.g. OTCBB and Pink Sheets. European examples of stock exchanges include the London Stock Exchange, the Deutsche Börse.

Participants in the stock market range from small individual stock investors to large hedge fund traders, who can be based anywhere. Their orders usually end up with a professional at a stock exchange, who executes the order.

Some exchanges are physical locations where transactions are carried out on a trading floor, by a method known as open outcry. This type of auction is used in stock exchanges and commodity exchanges where traders may enter "verbal" bids and offers simultaneously. The other type of stock exchange is a virtual kind, composed of a network of computers where trades are made electronically via traders.

Actual trades are based on an auction market model where a potential buyer bids a specific price for a stock and a potential seller asks a specific price for the stock. (Buying or selling at market means you will accept any ask price or bid price for the stock, respectively.) When the bid and ask prices match, a sale takes place, on a first-come-first-served basis if there are multiple bidders or askers at a given price.

The purpose of a stock exchange is to facilitate the exchange of securities between buyers and sellers, thus providing a marketplace (virtual or real). The exchanges provide real-time trading information on the listed securities, facilitating price discovery.

Mutual fund:

A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, bonds, short-term money market instruments, and/or other securities.The mutual fund will have a fund manager that trades the pooled money on a regular basis. The net proceeds or losses are then typically distributed to the investors annually.

Since 1940, there have been three basic types of investment companies in the United States: open-end funds, also known in the U.S. as mutual funds; unit investment trusts (UITs); and closed-end funds. Similar funds also operate in Canada. However, in the rest of the world, mutual fund is used as a generic term for various types of collective investment vehicles, such as unit trusts, open-ended investment companies (OEICs), unitized insurance funds, and undertakings for collective investments in transferable securities (UCITS).

Types of mutual funds :

Open-end fund
Exchange-traded funds
Equity funds
Capitalization
Growth vs. value
Index funds versus active management
Bond funds
Money market funds
Funds of funds
Hedge funds