Difference between PAN, TAN and TIN

Terms related to Income Tax can often be confusing, sounding similar but having different meanings and purposes. With numerous words commonly popping up when we file taxes or approach the Income Tax Department for clarification, knowing them can ease out the entire process, offering us valuable insight. Some of the most used terms we come across are PAN, TAN and TIN, each having subtle nuances which can simplify your word of tax.

Know the terms – PAN, TAN and TIN

Permanent Account Number – A Permanent Account Number or PAN is a unique 10 digit alphanumeric code which is provided to every taxpayer or assessee in the country. It is issued by the Income Tax Department and is a mandatory requirement for every entity indulging in economic activity beyond a certain financial limit in the country.

Tax Deduction and Collection Account Number – TAN is a unique 10 digit alpha numeric code whose primary purpose is related to deduction or collection of tax. All entities who deduct or collect tax must have a TAN, quoting it in their TDS or TCS documents.

Taxpayer Identification Number – TIN or Taxpayer Identification Number is an 11 digit numeric code which is mandatory for traders or dealers who participate in transactions which attract VAT. All businesses which participate in interstate trade are expected to have a TIN. A TIN is often called the VAT Number or Sales Tax Number and individuals should not confuse these terms.

Differences 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 (first 2 digits are the state code)
Code content	The first 5 digits are alphabets representing various information, followed by 4 numbers and an alphabet	A TAN is composed of 4 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 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 can be imposed 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
Documents required to apply	Valid ID proof, address proof, photographs (in case of individuals) and proof of age (date of birth)	None. In case of online application the signed acknowledgement needs to be submitted	Proof of registration, PAN, ID proof of owner, etc. (documents required are likely to vary depending on the state in which an entity applies)
How many can one own?	One	One	One
Cost of applying	Rs.107 if the communication address is located inside India and Rs.989 if the address is outside India	Rs.55 plus service tax	Varies from state to state