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Permanent Account Number (PAN) is a mandatory registration with the Income Tax Department of India required for all person and entities that are required to pay Income Tax and perform certain high-value transactions. The Income Tax Department uses the PAN to track all compliance and filings of an Income Tax Assesse using the PAN. PAN is a 10 digit alpha-number character, issued in the form of a laminated card. Once a PAN Card is issued, no continued compliance filings are necessary and it is valid for lifetime of the entity.
Tax Deduction & Collection Account Number (TAN) is a 10 digit alpha-numeric code required to be obtained by all persons who are responsible for Tax Deduction at Source (TDS) or Tax Collection at Source (TCS) on behalf of the Government. Under the Income Tax Act, a payer is required to deduct tax at appropriate rates, from payments of specific nature (like salary, payments to contractor or sub-contractors, professional charges, payment of rent, etc) and deposit the same with Central Government – quoting the TAN number. Individuals who are salaried are not required to obtain TAN or deduct tax at source.
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