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  • Category: Central Government

    What is the difference between TAN number and PAN number?

    Difference between TAN number and PAN number

    In the context of filing income tax returns, references are made about TAN number and PAN number. It is known that PAN number is acquired by the individuals filing income tax returns. Do all individuals require TAN number also? If not, then who requires to obtain a TAN number?
  • #137202
    Both of these are issued by the income tax department of India. In both the cases cards have 10 digit alphanumeric number. In case of PAN it is used for the financial transactions and tax filing. In case of TAN, it is used for .tax deduction at the source. So the TDS and other deductions are filed using TAN.

    Apart from that PAN and TAN differ in the way they are being used. PAN is mandatory for all who wish to collect the tax. In case of TAN, it is only to be used by those who collect service tax or the TDS.

    PAN application costs 177 Rs all costs included. Whereas the TAN costs 55 Rs. TAN is not forced on the individual unless he is collected TDS. So you don't need TAN in many circumstances. In case of PAN you are mandatory to have that for filing taxes.

  • #137226
    Well, both the cards are used for the purpose of Taxation. They differ in their functionality.

    PAN stands for Permanent Account Number. It is the account number of the assessee who's tax payment is assessed. Every individual who pays tax needs to have PAN. It should be stated while you pay income tax. An individual or a firm cannot have more than one PAN.

    TAN on the other hand stands for Tax deduction Account Number. It is to be used by those who are authorised to collect tax at source. It is used to deduct taxes of different sources.

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  • #137251
    As a salaried individual, we may be only receiving income and paying income tax on the income as per the IT rules. The IT department keeps records on our incomes and all our tax payments , IT return submission, refunds etc in a single permanent account on us. That account has a number and that is called Permanent Account Number or PAN number. The card given to us by the IT department specifying our PAN number is PAN card.

    However for many of us tax relating to the salary paid to us is deducted by the employer himself and remitted to IT department. The employer deducts tax from his various employees and remits the amount to the IT department for credit to the relevant PAN accounts of each employee. Each person who makes a TDS deduction from payments needs a Tax deduction Account Number. That number is TAN number and given to them by the IT department on proper application.

    TAN also significant for us, because if there are various TDS for us done by say on our FDs by different banks, then we can verify these from form26As by knowing the TAN numbers noted therein. That will help us to know if the TDS deducted is properly credited to our PAN account.

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