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 is a detailed lowdown on TAN, PAN, and TIN, so you can understand how these terms are different.
What is TAN number?
TAN is an acronym for tax deduction and collection account number. It is a 10-digit alphanumeric number issued by the Income Tax Department of India to all persons who are responsible for deducting or collecting tax at source (TDS or TCS). TAN is mandatory for filing TDS or TCS returns, challans, and certificates.
TAN consists of four alphabets, five numbers, and one alphabet. The first three alphabets represent the jurisdiction code, the fourth is the initial of the name of the holder (in case of individuals or firms), and the last is a check digit. For example, PDES03028F is a valid TAN.
It is mandatory to mention the 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.
What is PAN number?
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.
What is TIN number?
TIN or Tax Identification Number is issued by the commercial tax department of the respective state governments. Commonly known as VAT (value added tax), CST (central sales tax) number, or sales tax number, it is used to identify a business person/ entity who is registered under VAT.
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.
Difference 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 (the first two digits are the state code) |
| Code content | The first five digits are alphabets representing various information, followed by 4 numbers and an alphabet | A TAN is composed of four 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 the 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 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 |
| How many can one own? | Only one | Only one | Only one |
| Cost of applying | Rs. 107 if the communication address is inside India and Rs. 989 if the address is outside India | Rs. 55 plus service tax | It varies from state to state |
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.
How to apply for a TAN?
To apply for a TAN, you can either do it online or offline.
- Online application is done through the TIN website. Here you need to fill an online form and pay a fee of Rs. 77.
- Offline application is done by submitting a physical form (form 49B) and the fee to any TIN facilitation centres.
After applying, you can check the status of your TAN application on the TIN website.
How to apply for a PAN card?
To apply for a PAN card, you can either do it online or offline.
- Online application is done through the TIN website or the NSDL website. Here you need to fill an online form and pay a fee of Rs. 93 or Rs. 864 depending on your communication address.
- Offline application is done by submitting a physical form (form 49B) and the fee to any TIN facilitation centres.
After applying, you can check the status of your PAN card application on the TIN website or the NSDL website using your acknowledgement number.
