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  • 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

    PAN
    PAN Application Process
    PAN Card for Individuals/Company
    Linking of PAN Card
    Useful Articles on PAN Card

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