Northspread
Archive / Investment Adviser (Level 2) / Tools for Estate Planning
nism-series-xb-trust-pan-bank-account-demat-folio[ INVESTMENT ADVISER (LEVEL 2) ]

When opening a commercial bank account and Demat folio for an Irrevocable Private Family Trust, whose Permanent Account Number (PAN) is utilized?

[ A ]The personal PAN of the youngest grandchild.
[ B ]The bank's personal corporate PAN.
[ C ]The TRUST'S INDEPENDENT PAN (issued in the name of the Trust entity / Association of Persons), with the Trustees designated as authorized signing fiduciaries.[ CORRECT ]
[ D ]Trusts are barred from obtaining PAN cards.
Takeaway

The correct answer is C: an irrevocable private family trust operates its bank account and demat folio under its own independent PAN, issued in the name of the trust/AOP entity, with the trustees acting as authorized signatories.

Derivation
A trust is treated as a distinct assessable entity for tax purposes (typically under 'Trust' or 'AOP' status), separate from its settlor, trustees and beneficiaries as individuals. It must therefore apply for and obtain its own PAN before it can open bank accounts, demat folios or make investments in its own name -- using any individual's personal PAN (settlor, trustee or beneficiary) would be legally incorrect and would misattribute the trust's income and assets to that individual's personal tax return. The trustees sign on the account purely in their fiduciary capacity as authorized operators, not as the account's beneficial owner.
Why the others fail
A — The personal PAN of the youngest grandchild.
Incorrect and impractical; a minor beneficiary's personal PAN cannot be used for the trust's independent banking and demat operations.
B — The bank's personal corporate PAN.
Nonsensical; a commercial bank's own corporate PAN belongs to the bank as an institution, not to the customer trust it services.
D — Trusts are barred from obtaining PAN cards.
False; trusts routinely and lawfully obtain their own PAN for tax filing and banking purposes -- there is no such prohibition.