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PAN/TAN

About PAN/TAN

 

What is PAN?

PAN is a unique identification number assigned to Indians, mostly to those who pay tax. The PAN system of identification is a computer-based system that assigns unique identification number to every Indian tax paying entity. Through this method, all tax related information for a person is recorded against a single PAN number which acts as the primary key for storage of information.

Types of PAN Cards

PAN holders include individuals, companies, partnership firms, NGO’s as well as foreign firms also come under the purview of this directive.As a result, PAN cards are issued for individuals as well as companies.

  • PAN Card for Individuals
    A PAN card for individuals is used to keep track and link all financial transactions that attract tax, with the IT department calculating the total taxable amount due on the basis of this data.
  • PAN Card for Companies
    A PAN card for organisations is similar to that for individuals, with the exception that there is no photograph on the physical PAN card. Also in lieu of the date of birth mentioned on individual PAN cards, the date of registration of the company/organisation is mentioned.
  • PAN for foreign citizens in India
    All foreign citizens who wish to carry out business in India are required to obtain PAN. The procedure for doing so is same as applicable to resident Indians.

The IT Department calculates the amount of tax the company/organisation is required to pay through its various transactions, all of which now require quoting the PAN card.

Why is PAN important?

A PAN card is a document that no taxpayer can do without. Besides being compulsory in order to file your Income Tax returns and to receive a tax refund, a PAN card also serves an accepted proof of identity and has now been made mandatory for a number of transactions of both a business as well as a personal nature

What is TAN Number?

Tax deduction and collection Account Number or commonly known as TAN is a 10 digit alphanumeric number required to be obtained by all persons who are responsible for deducting or collecting the tax.

Who is eligible to apply for TAN?

As per Income Tax Act, a person who is one of the following is eligible for allotment of a TAN:

  • Company/Branch/Division of a company
  • Individual (Sole Proprietorship) / Branch of individual business
  • Firm / Branch of firm
  • Association of Persons/Body of Individuals/ Association of Persons (Trusts)/Artificial Juridical Person

Where is it mandatory to provide your TAN Number?

TAN is to be quoted in the following documents:

  • Tax Deducted at Source (TDS) Return/Certificate
  • Tax Collected at Source (TCS) Return/Certificate
  • Statement of Financial Transactions or Reportable Accounts
  • Challans for payments of TDS/TCS
  • TDS/TCS certificates

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