Throughout the term of a venture, businesses have to go through multiple documentation processes and pay taxes at regular intervals. Consequently, they are often required to keep vital information like business PAN or TIN handy.

The fact that terms like TIN, TAN and PAN are so similar often tends to confuse entrepreneurs. Regardless, to streamline the process of taxation and documentation, and ensure accurate information is furnished as and when required, individuals need to become familiar with these terms in detail. Subsequently, they should find out about the underlying difference between TIN and TAN to eliminate the confusion of any sort. 

What is TIN?

Tax Identification Number (TIN) is an 11-digit registration number that serves as an identification code. Essentially, TIN is allocated to business entities like enterprises and organisations that come under the purview of Value Added Tax. It is the traders, dealers, manufacturers and exporters required to register for TIN.

Notably, the first two characters of the tax identification number represent the code of the state. On the other hand, the subsequent characters represent the district and area where a specific dealer is registered.  

The TIN is required when there is an inter-state sale transaction or a transaction involving two or more states. One must note that it is compulsory for dealers, traders and manufactures to mention their TIN on their VAT collections. 

TIN provides individuals with an opportunity to simplify VAT transactions as it allows entities to find out –

  • The amount of VAT collected.
  • VAT that has been paid.
  • The amount of VAT to be paid in future.

One must note that TIN also comes handy as a vital tax document, especially during the annual or quarterly tax filing. It can also be used as the CST number as and when required. Entities should note that possessing multiple TIN attracts substantial penalty based on the state they are based. 

To gain a better insight into the fundamental difference between TIN and TAN, individuals should proceed to find out about TAN as well. 

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What is TAN?

Tax Deduction and Collection Account Number (TAN) is an alphanumeric code with 10 digits that is assigned by the Income Tax Department of India. The Section 203A of Income Tax Act, 1961 states that all entities that are responsible for collecting taxes or for deducting it must apply for TAN.

However, it is assigned as per the application submitted to the NSDL-TIN online or facilitation centre. One must note that it is compulsory for all entities to mention their TAN in TDS returns and payments, among others. Other than that, entities with TAN are required to quote it in these following cases –

  • TDS or TCS payment challans
  • Financial transaction statements
  • TDS or TCS certificates
  • Other relevant documents

Nevertheless, one must note that getting multiple TAN is illegal and businesses must get the duplicate TAN surrendered and subsequently cancelled. Notably, to cancel it, one has to avail the ‘Form for Changes or Correction in TAN’.  Entities who intend to apply for a new TAN must know that if they submit an incomplete Form 49B, their TAN application will be rejected.  

With this basic idea about the underlying concept of TIN and TAN, the difference between TIN and TAN number will be easier to understand. 

Difference between TIN and TAN Number

This table below will provide valuable insight into the major differences between TIN and TAN in a nutshell. 

Parameters  TIN TAN 
Binding law The law binding TIN depends on the state. TAN comes under the purview of Section 203A of Income Tax Act, 1961.
Issuing agency The Commercial Department of State issues TIN. The Income Tax Department of India issues TAN.
Code It is an 11-digit numeric code. It is a 10-digit alphanumeric code. 
Identification tag It serves as an identification number of dealers. It serves as an identification number of employers. 
Purpose The TIN comes in handy to track VAT-oriented details TAN helps to streamline the process involved in the collection and deduction of TDS.
Holder Entities like dealers, traders and manufacturers who come under the purview of VAT should get a TIN.  All entities that are responsible for collecting and deducting TDS are required to avail a TAN.
Form The type of form depends on the state the applicant is based.  Entities have to use Form 49B to avail of TAN. 
Documents required  To avail TIN, entities have to submit these documents –

  • PAN
  • Proof of registration
  • Proof of identity, etc.
Entities are required to submit only attested documents. 
Cost of applying  The cost of applying differs from one state to another. Rs. 55+ service tax.
Penalties  The penalty varies from one state to another. Rs. 10000

Besides these differences, there are a few similarities between TIN and TAN. For instance, they are both tax identifying numbers and help to streamline tax-related processes.

Though TIN and TAN are entirely different concepts, it is not impossible to confuse them. This is why business entities and other concerned individuals should make it a point to find out the fundamental difference between TIN and TAN.

Doing so, they will be better positioned to provide the correct identification code as and when required and complete the documentation process without hassle.