Overview: Difference Between PAN and TAN
To get and regulate tax collection from several revenues, the Income Tax (IT) department has brought numerous unique identification numbers, I.e. Permanent Account Number (PAN) & Tax Deduction & Collection Account Number (TAN) for a people, firms & organizations In India.
A permanent assesses has to take the initiative in getting these issued, in many cases the PAN and TAN identities are necessary.
Lets Understand the difference between PAN and TAN.
A permanent account number comes with the 10-digit alphanumeric number, distributed under section 139A of the IT Act, 1961, by the IT department. It allows the department to detect all the transactions of a tax assessment, such as tax fees, tax returns & defined transactions where PAN needs to be referred.
Everyone must have a PAN if the income gained while the year is taxable, which says that: Rs2.5 lakh or additional for a person below the age of 60 years, or more than Rs3 lakh for elderly citizens (above 60 years of age) & Rs5 lakh or extra for very senior citizens (above 80 years of age).
Apart from this, any person who is privileged to earn any income, after deduction of tax at source or who is accountable for giving money to excise duty & so on, wants to possess a PAN. Apart from that, for many cash transactions too, one has to provide PAN or Form No. 60 if PAN is not available.
A PAN card can be allocated to people, NRIs (Non-Resident Indians), enterprises, or anyone who gives taxes in India.
STRUCTURE PAN CARD
PAN cards include data such as an identity. They comply with Know Your Customer guidelines & age proof.
A PAN number is a 10-letter alphanumerical identification number that illustrates precise data about the card owner.
- The first three letters: This alphabetical list includes letters from A-Z.
- The fourth letter is the taxpayer’s classification. These are the numerous entities & their natures.
- The fifth letter: This is the initial of the card owner, which is a person’s surname.
- Resting letters: The remaining letters are uncertain. The first four characters are numbers and the latter one is an alphabet.
Once you obtained, PAN is valid in entire India & the expiration is until you die. The PAN essence doesn’t alter even if the modification includes the address of the person or the conducting officer.
However, any modification in the items that were given at the time of registering for the PAN, such as an address, must be signified to the department by providing the details in the form for ’Request For New PAN Card Or/ And the Modification Or Improvement in PAN Data.
There isn’t much difference between PAN and TAN (Tax Deduction & Collection Account Number) in terms of alphanumeric identity. However, TAN is even considering having a 10-digit alphanumeric number.
However, only those who are accountable for deducting or collecting tax want to obtain a TAN. For instance, an employer who wishes to subtract tax at source from employees’ revenue under section 192 of the Act, requires to amass a TAN.
If it is not mentioned, TDS or tax collected at source (TCS) retrievals will not be approved by Tax Information Network-Facilitation Centers (TIN-FCs) & the fine for TDS or TCS payments will not be endorsed by banks.
Neglect to register for TAN, or not mention it in the specified documents, entices a punishment fee of ₹10,000. As per the IT regulations, a real estate buyer has to take away TDS at the rate of 1% of the equity value if the real estate value is over ₹ 50 lakh.
Although, the real estate buyer does not have to obtain a TAN to do so. Rather, He/she can quote her PAN while subtracting & documenting the TDS return.
A TAN Number can be allocated to a person or firm, a business, or a corporation. In the case of a corporation or company, they will be dealt with as a person.
STRUCTURE OF TAN
This identifier will browse for several facts that are encoded utilizing a mixture of numbers and letters.
- The jurisdiction code for the owner is defined by the first three alphabets in TAN Number.
- The fourth letter is the preliminary of the name of the owner.
- The fifth letter is a sole specifying number that has no outcome.
- The alphabet’s last letter is the alphabet, & it is an unusual identifying entity.
To get and regulate tax collection from several revenues, the Income Tax (IT) department has brought numerous unique identification numbers, I.e. Permanent Account Number (PAN) & Tax Deduction & Collection Account Number (TAN).
To know more about PAN & TAN we are ODINT Consultancy, here to help you out in each & every step of yours.