Income tax is one of the most scary and complex topics for a lot of individuals. The calculation of tax and various terms associated with it make it difficult to grasp. TAN and TIN are two such terms that confuse a lot of people. Both these terms are relevant with respect to filing of tax in any financial year. Let us look into the definitions of TIN and TAN and see how are these two different.
What is TAN?
TAN is short-form for Tax Deduction and Collection Account Number. TAN is a unique ten-character code that is assigned to entities that are eligible for collecting TDS or tax on behalf of the Income Tax Department. TAN is required for furnishing TDS details collected by any entity. Examples of such entity include corporates, offices that deduct tax on behalf of tax department.
TAN is mandatory for such entities under section 203A of the Income Tax Act , 1961 and not quoting the same while filing TDS is subject to a penalty of Rs.10,000 as per section 272BB of the act.
As for PAN, TAN also can be applied either offline or online at the NSDL or UTITSL website. For offline application, form 49B needs to be filled and submitted at any of the TIN facilitation centers across the country. Online application of TAN can be made at the UTITSL or NSDL websites which are facilitation partners for the Income Tax Department for furnishing of TAN.
What is TIN?
TIN or Tax Identification Number is a unique 11 character identification number that is allotted to all taxpayers registered under VAT for sale of goods and services. Like individuals, all business enterprises too are required to file their taxes. The way PAN is required for any tax transaction handled by individuals, TIN is required by business enterprises. Quoting of TIN is mandatory for filing of taxes by a business enterprise. Failing to do so may attract penalty similar to how it is done for PAN.
TIN is used for transactions within a state or those between two or more states. Similar to TAN, TIN also can be applied either offline via TIN facilitation centers or through online platform TIN-NSDL which acts on behalf of the Income Tax Department of India.
Major Points of Difference between TIN and TAN:
| PARAMETER | TAN | TIN |
| Issuing Agency | Income Tax Department of India | Commercial Tax Department of the applicant’s state |
| Purpose | Streamline deduction and collection of tax at source | Track VAT related activities in the country |
| Form to be used for Application | Form 49B | Forms vary for different states |
| Code type | Alphanumeric code of 10 characters | 11 digit numeric code (where the first 2 digits signify the state of the applicant) |
| Structure of Code | TAN is composed of 4 alphabets, followed by 5 numbers, with an alphabet as the last character | TIN is composed of 11 digits only |
| Who should have it | Any entity that is eligible to deduct TDS on behalf of the Income Tax Department | Any enterprise that is liable to pay Value Added Tax or VAT |
| Sections of IT Act which account for it | Section 203A of Income Tax Act of 1961 | Different states have different Acts under which TIN is applicable |
| Fines/Penalties Applicable | Penalty of Rs. 10,000 may be levied | Penalties vary according to state |
| Documents Required to Apply | None. Only form 49B needs to be filled and submitted | Proof of registration, PAN, ID proof of owner, etc. (documents may vary depending on state) |
| Maximum number of TAN/TIN that can be owned by an entity | One | One |
| Cost of Application | Rs.55 plus service tax | Varies according to state |
FAQs on TAN and TIN:
1. Who allots TAN to applicants?
TAN is allotted by the Income Tax Department of India. TIN-NSDL and TIN facilitation centers are the entities who furnish TAN on behalf of the IT department.
2. What happens if my form 49B is submitted incomplete?
In case of incomplete forms 49B, the Income Tax Department rejects the TAN application.
3. How will I receive my TAN?
The IT department will ensure via NSDL that your TAN reaches your communication address mentioned in form 49B.
4. Are government agencies which deduct TDS on behalf of IT department required to possess TAN?
Yes. Any entity deducting tax on behalf of the IT department, public or private, is required to possess and furnish TAN wherever required.
5. What is duplicate TAN? Is it legal to hold multiple TANs?
Holding more than one TAN is illegal. If by any chance an entity gets allocated two TANs, then a case of duplicate TAN arises.
6. What do I do if I have two TANs allotted to me?
The ideal thing in such a case is to use the TAN which was assigned earlier and then surrender the newly or duplicate assigned TAN by using the particular form on the TIN-NSDL website.
7. Can I get any changes done for the TAN that has been furnished to me? Changes like those in name or address?
Yes. For changes to your TAN information, please fill in the correction/modification form on the TIN-NSDL website and submit the same. The same procedure can be followed for offline correction also through any of the TIN facilitation centers.
8. What if I possess multiple TIN?
Same as PAN, multiple TINs may impose a penalty fee depending upon the state in which it is issued.
9. Who furnishes TIN to applicable entities?
The Commercial Tax Department of the applicant’s respective state furnishes TIN.
10. What is the importance of TIN?
Just like for identifying tax related activities of individuals, PAN is required, similarly for tracking tax transactions of business enterprises, TIN is required by the Income Tax Department.