2 min read
25 May 2021

TAN, PAN, and TIN are common terms you may encounter when filing your returns or contacting the Income Tax Department. Understanding these terms beforehand can simplify the world of tax for you, making filing returns easier. Here’s a detailed lowdown on TAN, PAN and TIN, so you can understand how these terms are different.

TAN

Know what TAN or Tax Deduction and Collection Account Number identifies an individual/ company/ organisation requires to streamline both deduction and collection of tax at source (TDS/ TCS). The Income Tax Department allows the number. It consists of 10 characters - four alphabets followed by five numerals and an alphabet in the end.

It is mandatory to mention TAN Number in every document related to TDS or TCS by the deductor. Failure to quote TAN can result in the rejection of TDS payments and returns by the banks. Registration for TAN can be done both online and offline by filling and submitting form 49B.

PAN

While TAN is a number allocated to tax-deductors, PAN or Permanent Account Number is allotted to taxpayers. PAN is also a 10-digit identity number mandated by the Income Tax Department for any individual who carries out financial transactions or pays the Income Tax.

PAN is issued under section 139A of the Income Tax Act, 1961, one of the most important forms of identity for every Indian citizen. This proof of identity is used to file various financial documents, like tax payments, returns, tax arrears, etc. It is also needed for all those individuals who are liable to receive any income after TDS.

Additional read: Apply PAN card online

Additional read: How to apply for a duplicate PAN card?

TIN

TIN or Tax Identification Number is issued by the Commercial Tax Department of the respective state governments. It is used to identify a business person/ entity who is registered under VAT. It is also commonly known as VAT (Value Added Tax), CST (Central Sales Tax) number or Sales Tax Number.

TIN is mandatory for every business person who pays VAT, making it easier for them to track all their VAT payments under a single roof and is also used for sales that are carried out between two or more states. It has eleven numeric characters; the first two digits reflect the state’s code as suggested by the Ministry of Home Affairs. The remaining nine signify the district or town where the businessperson/ entity is registered.

All of us relate to these terms in one way or another, especially when filing taxes or applying for TDS certificates. Understanding these basic differences between TAN, PAN and TIN can make your financial lives easy so that you can inch closer towards financial freedom.

DISCLAIMER:
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent inaccuracies or typographical errors or delays in updating the information. The material contained in this site, and on associated web pages, is for reference and general information purpose and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Subscribers and users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. In case any inconsistencies observed, please click on reach us.

*Terms and conditions apply