PAN stands for Permanent Account Number. PAN is a ten-digit unique alphanumeric number issued by the Income Tax Department. PAN is issued in the form of a laminated plastic card (commonly known as PAN card)
TAN is to be obtained by all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS).
It is statutory Obligation that
TAN Tax Deduction Account Number or Tax Collection Account Number is a 10-digit alphanumeric number issued by the Income-tax Department (we will refer to it as TAN).
Why is it necessary to have TAN?
The provisions of Section 203A of the Income Tax Act, 1961 require all persons who deduct or collect tax at source to apply for the allotment of TAN. The section also makes it mandatory to quote TAN in all TDS /TCS/Annual Information Returns, payment challans and certificates to be issued. Deductor cannot file TDS /TCS statements and deposit challans for TDS /TCS payments in banks without TAN. Failure to apply for TAN or not quoting the same in the specified documents attracts a penalty of ` 10,000/-.