1. Permanent Account Number (PAN)
PAN is a 10-character alphanumeric unique identifier issued by the Income Tax Department under Section 139A of the Income-tax Act, 1961. It is mandatory for:
- Filing income tax returns
- Conducting high-value financial transactions
- Opening bank accounts, demat accounts, etc.
- Deducting or collecting TDS/TCS
- Quoting in various compliance documents (e.g., Form 15CA/CB, TDS returns)
PAN is issued to individuals, HUFs, companies, firms, LLPs, trusts, and other entities. It helps in tracking tax compliance and linking all transactions with the Income Tax Department. The application is made using Form 49A (for residents) or Form 49AA (for non-residents) through NSDL or UTIITSL.
2. Tax Deduction and Collection Account Number (TAN)
TAN is a 10-character alphanumeric code required under Section 203A of the Income-tax Act, 1961, by persons or entities who are liable to deduct or collect tax at source. It is mandatory for:
- Filing TDS/TCS returns
- Issuing TDS certificates (Form 16, 16A)
- Depositing TDS/TCS with the government
- Quoting in TDS challans and returns (Form 24Q, 26Q, 27EQ, etc.)
TAN is different from PAN and is specific to the TDS compliance role. Application for TAN is made in Form 49B through NSDL.
| Criteria | PAN | TAN |
| Purpose | Taxpayer Identification | TDS/TCS Compliance |
| Mandatory For | All taxpayers | All TDS deductors and TCS collectors |
| Form Used | 49A / 49AA | 49B |
| Structure | 10-character alphanumeric | 10-character alphanumeric |
| Issued By | Income Tax Department | Income Tax Department |
| Penalty for Non-Compliance | ₹10,000 u/s 272B | ₹10,000 u/s 272BB |