Difference Between PAN, TAN and TIN

The TIN, PAN and TAN full forms can be studied as Taxpayer Identification Number, Permanent Account Number and Tax Deduction and Collection Account Number, respectively. These documents are among the most important documents required to carry out several activities like filing ITR, trading, deduction or collection of taxes etc. Each document has its importance and use and can be very well differentiated but is often confused as similar.

This guide aims to clear the air by talking about in detail the difference between TIN and TAN and PAN.

A Detailed Comparison Between PAN, TAN and TIN 

A person may find the various income tax terminologies to be confusing. Knowing these terms can simplify the process and provide information about the functioning of the Income Tax Department. PAN, TAN, and TIN are some of the most often terminologies we see; each has minor distinctions that might make your understanding of taxes easier. Let’s have a look at the detailed table below highlighting the difference between PAN and TAN and TIN.

Parameters	PAN	TIN	TAN
Issuing Agency	Income Tax Department	The Respective State’s Commercial Tax Department	Income Tax Department
Code	10-digit Alphanumeric number	11-digit code	10-digit Alphanumeric number
Purpose	Used for monetary exchanges, acts as identification proof and is used to purchase or sell real estate, vehicles, etc.	Track activities related to VAT	Used to calculate and collect taxes
Who should have it	Taxpayers/ Non-Taxpayers, foreign nationals and entities	Dealers, exporters, traders	People permitted to collect or deduct tax under section 203 A
Laws	Section 139A of the Income Tax Act of 1961	Different states, different laws	Section 203A of the Income Tax Act of 1961
Penalty	INR 10,000	Penalty vary as per the states	INR 10,000
Forms to fill	Indian residents need to fill out Form 49A, and NRIs are required to fill  Form 49AA	Forms differ as per the States	Form 49B
Number of Cards	1	1	1

PAN – Permanent Account Number

Each taxpayer or assessee in the nation receives a PAN or a Permanent Account Number, a 10-digit alphanumeric code that is unique. It is a mandated obligation for every entity engaging in economic activity in the nation over a specified financial threshold given by the Income Tax Department.

Eligibility

If you find yourself functioning as any of the following, you are eligible to apply for a PAN card.

• Individuals falling under the taxable slab rate
• Non-Residents of India
• Foreign entities
• Company
• Students who are non-taxpayers

Document

The applicant recognising as HUF, individual or company, etc., requires a different set of documents. A few general documents are given below. 

• Identity proof
• Address proof
• Date of birth proof

Use

A PAN card has various uses. Some of them are listed below.

• Each financial transaction needs a PAN.
• It serves as the person’s identity evidence.
• It is employed for taxation purposes like filing ITR.
• You can also use the PAN to buy or sell vehicles, real estate, and other comparable assets.
• Carry out banking-related activities like opening bank accounts

TAN – Tax Deduction and Collection Account Number

The main function of the 10-digit alphanumeric code known as TAN or Tax Deduction and Collection Account Number is to facilitate tax deduction or collection. Each entity that deducts or collects tax is required to have a TAN and use it in their TDS or TCS paperwork.

Eligibility

If you find yourself functioning as any of the following, you are eligible to apply for TAN.

• A company’s branch or division
• Central/State Government/Local Authorities
• Company
• Individual business’ branches
• Individual/HUFs
• Firm /Association of Persons/Trusts

Document

Applicants are not required to produce any documents while requesting a new TAN. If they apply for a new TAN online, the only document needed to submit is the self-attested acknowledgement slip.

Use

The Tax Deduction and Collection Account Number has the following uses.

• TAN is utilised for deductions such as wages, interest, dividends, etc
• It can be applied to certificates, challans, and refunds.
• It automatically records the full address of the individual who withholds taxes on the IT department’s behalf. The Postal Index Number registered with the Income Tax Department is captured.

It is prohibited for someone to own more than one TAN. However, multiple collector branches or divisions may submit separate TAN applications for each branch or division.

TIN – Taxpayer Identification Number

The Taxpayer Identification Number or TIN is an 11-digit numerical code that must be used by traders or dealers that engage in VAT-attracting activities. Every company that engages in interstate commerce is required to have a TIN. People should not mix up the phrases TIN and VAT number, which are sometimes used interchangeably.

Eligibility

If you find yourself functioning as any of the following, you are eligible to apply for TIN.

• Traders
• Manufacturers
• Exporters
• Dealers

Document

The documents required for TIN vary from one state to another. However, the following listed documents are most often required.

• Address proof like an Aadhaar card, PAN card, utility bills etc.
• Identity proof like an Aadhaar card, passport, driving license etc
• PAN card
• Address proof of the location of the business 
• Six passport-size photographs
• Purchase invoice, collection proof with bank statement, copy of GR & Payment/LR

Use

A document that all businesses with VAT registration are expected to have – TIN is issued by the Commercial Tax Department of each Indian State and has the following use:

• It helps a company to monitor its transactions.
• Every time products or services are sold within a state or between two or more states, TIN is used.
• It is a contemporary approach to the collection, processing, supervision and accounting of direct taxes.
• For all VAT transactions, the TIN must be provided.

Final Words

We hope you have a better understanding of the difference between PAN and TAN and TIN and that the confusion between the three terminologies of income tax has evaporated. They must mention this special identification number when performing other tax-related tasks. The filing process and the justification for filing are where PAN, TAN, and TIN diverge most. Every entrepreneur needs these figures to carry out business operations.