Difference Between PAN, TAN and TIN

Every industry or business has its own terminology as well as abbreviations. In India, three numbers that are associated to financial transactions are PAN, TAN, and TIN.  PAN is known as Permanent Account Number, TAN is called as Tax Deduction Account Number and TIN is known as for Taxpayer Identification Number.

Difference Between PAN, TAN and TIN

CONSTRAINTS	PAN	TAN	TIN
Issuing agency	Income Tax or IT Department	Income Tax Department	Commercial Tax Department of particular state
Code type	Ten digit alphanumeric code	Ten digit alphanumeric code	Eleven digit numeric code
Code content	Initial five digits are alphabets showing different information, followed by four numbers and an alphabet	A TAN is made up of four alphabets, followed by five numbers, with an alphabet as the final digit	A TIN is made up of eleven numbers
Function	PAN works as a universal identification code for monetary transactions	Rationalize deduction and compilation of tax at source	Track VAT related activities in the country
Who should possess it	Every taxpayer	Every person/entity who has to subtract or gather tax at source	Any dealer or trader who is accountable to pay VAT
Laws which Account for it	Section 139 A of the IT Act of 1961	Section 203A of IT Act of 1961	Different states have different acts under which TIN is valid
Fines	A fine of Rs 10,000 can be imposed for failure to abide by the rules	A fine of Rs 10,000 can be imposed for failure to abide by the rules	Fines differ from state to state
Form to be used for submission	Form 49A for Indians, Form 49AA for Foreigners	Form 49B	Forms vary from state to state
Documents needed to apply	Valid identity proof, address proof, photographs and proof of age	None. In case of online application the signed acknowledgement requires being submitted	Evidence of registration, PAN, ID proof of possessor, etc.
How many can one possess?	One	One	One
Charges of applying	Rs.107 if the communication address is present inside India and Rs.989 if the address is out of India	Rs.55 plus service tax	Differs from state to state

PAN or Permanent Account Number

A Permanent Account Number or PAN is a unique ten digit code which is given to every taxpayer in the country and Business, Individuals, Trusts, HUFs, Foreign Citizens and lot more. It is provided by the Income Tax Department. PAN is primarily used by the IT department to keep a check on financial transactions that could hold a taxable constituent. PAN is also a significant form of identity.

Once acquired, PAN is applicable all through India and for the life span of the assessee. The PAN identity does not vary even if the change includes address of the assessee or the assessing bureaucrat. However, any modification in the details that were given at the time of applying for PAN like address should be furtive to the department by providing the details in the form for Request for New PAN Card or change of address in PAN Card, name or other and Correction in PAN Information.

It is significant for every person to have a PAN, if the income made during the year is assessable nor taxable, which means: Rs. 2.5 lakh or more for persons below the age of 60 years, or more than Rs. 3 lakh for senior citizens above 60 years of age and Rs.5 lakh or more for very senior citizens above the age of 80 years.

Besides that, any person who is allowed to obtain any income, after subtraction of tax at source or who is accountable to pay excise duty and so on requires having a PAN. Rather than that, for different cash transactions as well, one has to provide PAN or Form No. 60 if PAN is not accessible. In a present move, the Central Board of Direct Taxes (CBDT) has made it compulsory for all account holders in banks and post offices to give PAN or Form No. 60.

TAN or Tax Deduction and Collection Account Number

TAN is a unique ten digit alphanumeric number linked to subtraction or assortment of tax. All entities that subtract or gather tax must have a TAN, quoting it in their TDS or TCS documents. For example, an employer who requires deducting tax at source from employees’ income under section 192 of the Act requires having a TAN. Under section 203A of the Act, it is compulsory to quote TAN on all tax subtracted at source (TDS) returns. If it is not estimated, TDS or tax gathered at source returns will not be recognized by Tax Information Network-Facilitation Centres and the challans for TDS or TCS payments will not be established by banks. Failing to apply for TAN, or not quoting it in the particular documents, brings in a penalty of Rs. 10,000.

According to the income tax regulations, a property buyer has to subtract TDS at the rate of 1% of the property value if the property value is over Rs. 50 lakh. In such conditions, the property buyer does not have to bring in a TAN to do so. In its place, one can state PAN whereas subtracting and filing the TDS return.

TIN or Taxpayer Identification Number

Taxpayer Identification Number or TIN is a unique eleven digit numeric code needed for all entities that are listed under VAT. TIN number is used to find out dealers who are listed under VAT and it is also used for through-way sales done between two or more states. TIN is also called as VAT number or CST number or Sales Tax number. TIN is a unique number that is provided by the CST department of every state government.

TIN number or VAT registration is must for businesses that are selling goods or products such as exporters, dealers, manufactures, shopkeepers, eCommerce sellers selling goods, etc.

TAN is to be acquired by the individual accountable to deduct tax, which means the deductor. In all the documents associated to TDS and all the communication with the IT department related to TDS one has to estimate his TAN.