Difference between PAN, TAN and TIN

Income tax jargons can be perplexing. This is one of the reasons why people often avoid doing tax-related processes on their own. What sounds similar may serve different purposes and be intended for people or entities other than you. The most common misunderstanding is about PAN, TIN, and TAN. This misinterpretation can lead one to pay hefty penalties.

Read on to understand the meaning and application process for all three documents, as well as the major differences.
 

What is PAN?

PAN, or Permanent Account Number, is a 10-digit alphanumeric number assigned to each taxpayer by the Income Tax department. Since PAN is a unique number that is fed into the electronic system, it allows the government to track all major and minor financial transactions made by the PAN card holder. According to the rule, no single individual entity can have two PANs. 
 
PAN is issued to seven types of people:
 

• Hindu undivided family (HUF)
• Individual
• Company
• Society
• Partnership firm
• Trusts
• Foreigners

 

Understanding PAN structure

The face of your PAN (individual) contains your name, father's name, and date of birth. Well, these are the basics; it is time to break down the ten-digit alphanumeric number to better understand it.
 

First three digits

It is an auto-generated alphabetic letter and can be anything from A to Z.
 

Fourth digit

It represents the type of taxpayer you are. Here is what each character means.
 

• "A" means Association of Persons
• "B" means Body of Individuals
• "C" means Company
• "F" symbolises Firm
• "H" represents Hindu Undivided Family
• "L" means Local Authority
• "J" symbolises Artificial Judicial Person
• "P" indicates Individual
• "T" represents the Association of Persons for a Trust

 

Fifth digit

It represents the first letter of your surname.
 

Remaining digits

They are chosen by the system randomly, with the first four being numerical and the last being alphabetical.
 

What is the application fee for PAN?

PAN costs Rs 93 for people with an Indian communication address. Those who have international communication addresses must pay Rs 864. The price specified here does not include GST.
 

How to apply for a PAN?

Similar to TAN, you can apply for this unique number online or offline. Here are the details.
 

Online process

• Visit the NSDL portal. You may also visit the UTIITSL website.
• Fill out Form 49A with the necessary information.
• Upload the mandatory documents.
• Pay the applicable fees.

 
You will receive the PAN card at your residential address after successful verification.
 

Offline process

• Go to an authorised PAN centre.
• Get the offline form, fill it out, attach a copy of the required documents, and hand it in at the counter.
• Pay the applicable fee.
• The PAN will be sent to the residential address you provided after verification.

 
Also Read: Advantages of Having a Pan Card
 

What is TAN?

The Income Tax Department issues a TAN, or Tax Deduction and Collection Account Number, to anyone who is involved in the deduction or collection of taxes. It is a ten-digit alphanumeric number that, according to Section 203A of the Income Tax Act, must be quoted on all TCS and TDS returns.
 

Understanding TAN structure

To understand TAN, you must first decode its structure, which we have described below.
 

• First three digits:

It represents the jurisdiction in which this number is issued.
 

• Fourth digit

It represents the initials of the person or entity to whom the TAN is issued.
 

• Fifth to the ninth digit

It is system-generated unique numerics that differ for each TAN holder. 
 

• Tenth digit:

It is also a system-generated unique letter.
 

How to apply for a TAN?

You can submit the TAN application online and offline. Let's discuss both one by one. 
 

Offline process

• Visit the NSDL portal and download Form 49B.
• Fill out the form with the necessary information and send it to the TIN-Facilitation Center.
• Pay the applicable fees.

 
Note: You do not need to attach supporting documents if you apply in person.
 

Online process

• Visit the NSDL website.
• Fill out the online form after reading the given instructions carefully. 
• After successfully submitting the form, you will receive an acknowledgement number.
• Print this number and send it to the NSDL Pune office.
• You can pay the fees online or offline with a cheque or a demand draft.

 

What is the application fee for TAN?

The Income Tax department charges Rs 65 for the TAN application processing. The amount mentioned here is inclusive of GST. 
 

What is the TIN number in India?

TIN or Taxpayer Identification Number is required for businesses that have VAT or CST registration. It is an 11-digit unique numeric allotted to each person. The concept behind TIN is to centralise all tax-related information for companies that transact with dealers, traders, and retailers of multiple Indian states.
 

Understanding TIN structure

TIN is made up of 11 digits, the first two of which represent the state code in which the business operates. Here is a table that explains everything.
 

09: Uttar Pradesh	11: Sikkim	29: Karnataka
19: West Bengal	28: Andhra Pradesh	32: Kerala
05: Uttarakhand	18: Assam	27: Maharashtra
33: Tamil Nadu	10: Bihar	14: Manipur
23: Madhya Pradesh	04: Chandigarh	17: Meghalaya
31: Lakshadweep	22: Chattisgarh	15: Mizoram
02: Himachal Pradesh	07: Delhi	13: Nagaland
25: Daman and Diu	30: Goa	21: Odisha
26: Dadra and Nagar Haveli	24: Gujarat	34: Pondicherry
01: Jammu and Kashmir	06: Haryana	03: Punjab
12: Arunachal Pradesh	20: Jharkhand	30: Rajasthan
35: Andaman and Nicobar Islands	33: Telangana	16: Tripura

 

How to apply for a TIN?

The TIN allotment application can be submitted online or in person. Here is how:
 

Online process

• Visit the Commercial Tax Department portal or the official VAT website of the state where your business operates. 

• Register your company on the portal and fill out the form with the necessary information.

• Upload the mandatory documents.

• The Commercial Tax Department will then cross-check your information, and only if it is satisfactory will the TIN be issued.

 

Offline process

• Download the registration form through the Commercial Tax Department portal. 

• Fill out the form and sign in the applicable places. Then, enclose all necessary documentation with the form and submit it to the facilitation centre.

• The relevant authority will verify your information before issuing you with a TIN and a VAT registration certificate.

 

Difference between TAN, PAN, and TIN

As previously discussed, TAN and PAN are issued by the Income Tax department. Whereas; it is the state government's commercial tax department that issues TIN. Here is a tabular presentation to show you the key differences.
 

Parameters	TAN	PAN	TIN
Number of digits	10-digit alphanumeric number	10-digit alphanumeric number	11-digit code
Purpose	It is used for tax collection and deduction.	The government uses it to track your financial transactions. It also serves as identification proof when applying for a loan, such as a personal loan, or when applying for any other vital documents.	The government uses it to keep track of VAT-related transactions.
Regulation	Section 203A of the Income Tax Act includes provisions concerning the TAN card.	Section 139A of the Income Tax Act contains provisions relating to the PAN card.	Each state has its own set of laws concerning TIN.
Penalty	Rs 10,000	Rs 10,000	Different for each state.
Forms to fill	You can apply for it using form 49B.	If you are an Indian citizen, you can apply for a PAN by completing Form 49A. Foreign nationals must use Form 49AA to submit their request.	Different across each state.
Applicability	People in charge of tax collection or deduction.	Taxpayers, non-taxpayers, foreigners (individuals and entities)	Traders, dealers, and exporters

 

Also Read: GST and It's Various Facets
 

To conclude

The Income Tax Department requires these critical documents/numbers during sales or income tax formalities. However, keep in mind that each of these unique numbers is unique and serves a different purpose. Failure to comply with the provision of these documents would result in a hefty penalty.