PAN & TAN

Dear Viewers & Accountants,

Lots of people don’t know about difference in PAN (Permanent Account Number) or TAN (Tax Collection & Deduction Account Number).

PAN (Permanent Account Number) & TAN (Tax Collection & Deduction Account Number) both are 10 digit alphanumeric. But there is difference between both, PAN (Permanent account number) has First 5 alphabets after 4 numbers and last is alphabet, as shown below example:

PAN:  AAAAA1234A 

FAQ ON PAN

Q1. What is PAN? Ans :  Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by an Assessing Officer of the Income Tax Department. A typical PAN is AFRPP1595D.

Q2. What is the purpose of having a Permanent Account Number (PAN)? Ans :  It is mandatory to quote PAN on return of income, all correspondence with any income tax authority and challans for any payments due to Income Tax Department. It is also compulsory to quote PAN in all documents pertaining to economic or financial transactions notified from time-to-time by the Central Board of Direct Taxes. Some such transactions are sale and purchase of immovable property or motor vehicle or payments to hotels for bills or payments in cash, of amounts exceeding Rs.25,000/- , in connection with travel to any foreign country. It is also mandatory to mention PAN for obtaining a telephone or cellular telephone connection. Likewise, PAN has to be mentioned for making a time deposit exceeding Rs.50,000/- with a Bank or Post Office or depositing cash of Rs. 50,000/- or more in a Bank.

Q3. Is it compulsory to quote PAN on return of income ? Ans :Yes, it is compulsory to quote PAN on return on income.

Q4. Who must have a PAN ? Ans : i. All existing assessees or taxpayers or persons who are required to furnish a return of income, even on behalf of others, must obtain PAN . ii. Any person, who intends to enter into economic or financial transactions where quoting PAN is mandatory, must also obtain PAN. The Assessing Officer may allot PAN to any person either on his own or on a specific request from such person.

Know your pan

But TAN (Tax Collection & Deduction Account Number) has First 4 Character is alphabets after 5 is numbers and last is alphabet, as shown below.

TAN:  AAAA12345A

FAQ ON TAN

Q1. What is TAN? Ans :  TAN or Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. It is compulsory to quote TAN in TDS/TCS return (including any e-TDS/TCS return), any TDS/TCS payment challan and TDS/TCS certificates.

Q2. Who must apply for TAN? Ans :  All those persons who are required to deduct tax at source or collect tax at source on behalf of Income Tax Department are required to apply for and obtain TAN.

Q3. Why to apply for TAN? Ans: The provisions of section 203A of the Income-tax Act require all persons who deduct or collect tax at source to apply for the allotment of a TAN. The section also makes it mandatory for TAN to be quoted in all TDS/TCS returns, all TDS/TCS payment challans and all TDS/TCS certificates to be issued. Failure to apply for TAN or comply with any of the other provisions of the section attracts a penalty of Rs. 10,000/-.

Q4. Why is it necessary to have TAN? Ans :TAN is required to be quoted in all TDS/TCS returns, all TDS/TCS payment challans and all TDS/TCS certificates to be issued. TDS/TCS returns will not be received if TAN is not quoted and challans for TDS/TCS payments will not be accepted by banks. Failure to apply for TAN or not quoting the same in the specified documents attracts a penalty of Rs. 10,000/- .

Q5. How to apply for TAN? Ans :An application for allotment of TAN is to be filed in Form 49B and submitted at any of the TIN Facilitation Centres meant for receipt of e-TDS returns. Addresses of the TIN FC are available at www.incometaxindia.gov.in or http://tin.nsdl.com.

Know your TAN

Thanks & Regards