TAN Card- PAN Card (Permanent Account Number)… This 10-digit number is today the biggest proof of our financial identity. From opening a bank account to filing income tax returns (ITR), buying property, and making large transactions, a PAN card is required everywhere. But have you ever heard of a TAN Card (Tax Deduction and Collection Account Number)?
Most common people are unaware of it, but if you run a business, own a company, or deduct tax while making payments in any form, then this TAN number is as crucial for you as the PAN card, if not more. Let’s understand today what exactly this TAN is and whom it serves.
What is a TAN number?
TAN stands for Tax Deduction and Collection Account Number. It is also a 10-digit alphanumeric number issued by the income tax department. Its purpose is to identify all individuals or entities responsible for tax deduction at source (TDS) or tax collected at source (TCS). In simple words, if you are making a payment to someone and you are responsible for deducting tax on that payment under the law and depositing it with the government, then it is mandatory for you to have a TAN number.
What is the major difference between PAN and TAN?
Both the PAN card and TAN card are issued by the Income Tax Department. Both have a ten-digit number. However, they are used for different purposes. People who pay taxes are required to obtain a PAN card because they need to enter this ten-digit number when filing taxes. Additionally, the government uses the PAN to monitor large transactions made by you. On the other hand, those who deduct tax need a TAN number. The TAN number is essential for all documents related to TDS.
How to apply for TAN?
Applying for TAN is very easy. Just like a PAN card, a TAN card can be made both online and offline. You will need to fill out Form 49B and also pay a nominal fee. You can make the payment through an online credit card, demand draft, check, or net banking. To apply for an online TAN card, you can go to the NSDL (National Securities Depository Limited) website. The TAN card will arrive at your home within 15 days of applying.