Tax Deduction and Collection Account Number – TAN
TAN stands for Tax Deduction and Collection Account Number. It is a ten-digit alphanumeric number allotted to those who are supposed to deduct tax at source or TDS. TAN number or registration is significant for businesses deducting tax at source and must be quoted in TDS or TCS return. Failure to apply TAN when required can attract a penalty. Once TAN is obtained, the business must file TDS returns quarterly.
Permanent Account Number – PAN
A permanent Account Number (PAN) is a unique ten-digit alphanumeric identification issued to each taxpayer – Businesses, Individuals, Trusts, HUFs, Foreign Citizens, and more. The Income Tax Department gives a PAN card or numbers. A PAN card is an effective form of identity and is mandatory for Indian Citizens starting a company or LLP. PAN is mainly used by the Income Tax Department to check on financial transactions that could carry a taxable component. PAN is now required for many mundane transactions like remitting high-value cash deposits, obtaining a loan, purchasing a property, and more.