Difference between PAN, TAN and TIN

Terms related to Income Tax can often be confusing, sounding similar but having different meanings and purposes. With numerous words commonly popping up when we file taxes or approach the Income Tax Department for clarification, knowing them can ease out the entire process, offering us valuable insight. Some of the most used terms we come across are PAN, TAN and TIN, each having subtle nuances which can simplify your word of tax.

Know the terms – PAN, TAN and TIN

Permanent Account Number – A Permanent Account Number or PAN is a unique 10 digit alphanumeric code which is provided to every taxpayer or assessee in the country. It is issued by the Income Tax Department and is a mandatory requirement for every entity indulging in economic activity beyond a certain financial limit in the country.

Tax Deduction and Collection Account Number – TAN is a unique 10 digit alpha numeric code whose primary purpose is related to deduction or collection of tax. All entities who deduct or collect tax must have a TAN, quoting it in their TDS or TCS documents.

Taxpayer Identification Number – TIN or Taxpayer Identification Number is an 11 digit numeric code which is mandatory for traders or dealers who participate in transactions which attract VAT. All businesses which participate in interstate trade are expected to have a TIN. A TIN is often called the VAT Number or Sales Tax Number and individuals should not confuse these terms.

Differences between PAN, TAN and TIN

PARAMETER

PAN

TAN

TIN

Issuing Agency

Income Tax Department

Income Tax Department

Commercial Tax Department of respective state

Code type

10 digit alphanumeric code

10 digit alphanumeric code

11 digit numeric code (first 2 digits are the state code)

Code content

The first 5 digits are alphabets representing various information, followed by 4 numbers and an alphabet

A TAN is composed of 4 alphabets, followed by 5 numbers, with an alphabet as the last digit

A TIN is composed of 11 numbers

Purpose

PAN acts as a universal identification code for financial transactions

Streamline deduction and collection of tax at source

Track VAT related activities in the country

Who should own it

Every taxpayer/assessee

Every individual/entity who has to deduct or collect tax at source

Any dealer or trader who is liable to pay VAT

Laws which account for it

Section 139 A of the IT Act of 1961

Section 203A of Income Tax Act of 1961

Different states have different Acts under which TIN is applicable

Fines/Penalties

A penalty of Rs 10,000 can be imposed for failure to comply with the rules

A penalty of Rs 10,000 can be imposed for failure to comply with the rules

Penalties vary from state to state

Form to be used for application

Form 49A (Indians), Form 49AA (Foreigners)

Form 49B

Forms vary from state to state

Documents required to apply

Valid ID proof, address proof, photographs (in case of individuals) and proof of age (date of birth)

None. In case of online application the signed acknowledgement needs to be submitted

Proof of registration, PAN, ID proof of owner, etc. (documents required are likely to vary depending on the state in which an entity applies)

How many can one own?

One

One

One

Cost of applying

Rs.107 if the communication address is located inside India and Rs.989 if the address is outside India

Rs.55 plus service tax

Varies from state to state

*Disclaimer

  • Govt Eases Pan Norms For Corporate Entities

    The government has released new guidelines for corporates applying for PAN cards. Companies applying for a PAN card and TAN number can now be made through a common application form. This form is to be submitted to the Ministry of Corporate Affairs.

    Companies applying for a TAN and PAN in this way will have a Certificate of Incorporation (COI) that mentions both the PAN and TAN in the document.

    With the removal of the provision mandating that PAN cards have to be issued on laminated paper, mentioning the PAN and TAN on one document can be considered as adequate proof.

    18 April 2018

  • No separate PAN and TAN applications required under company incorporation process

    To further ease incorporation-related process for newly established firms, the Ministry of Corporate Affairs (MCA) announced that there is no need to upload Form 49 A and Form 49B separately after filing SPICe e-forms.

    According to the revision, which comes in to effect from 4 November 2017, stakeholders don’t have to upload separate application for allotment of PAN (Form 49A) and TAN (Form 49B), while submitting or resubmitting any fresh SPICe e-form. Based on the details furnished in the SPICe, PAN and TAN will is issued as before.

    Currently, PAN and TAN for newly-incorporated firms are being issued in one day. As soon as Central Board of Direct Taxes (CBDT) receives incorporation data from MCA, it will issue PAN and TAN without any further intervention of the applicant. While the new PAN is included in the Certificate of Incorporation (COI) of the new firm, TAN will be allotted separately and the same will be communicated to the applicant company.

    CBDT is working continuously to improve the ease of doing business for new firms in India. By reducing the number of processes for registering new firms, by quickly allotting registration numbers such as CIN, PAN and TAN and by simplifying the entire registration process for the new companies, CBDT is aiming to improve the ranking of India in the Ease of Doing Business Study conducted by World Bank. As a part of it, it already introduced the electronic PAN card (E-PAN), which will be sent to applicants e-mail besides issuing it physically.

    15 November 2017

About Pan Card
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