What is difference between PAN and TAN?
PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) are both unique identification numbers issued by the Income Tax Department of India.
PAN: PAN is a 10-digit alphanumeric number assigned to individuals, firms, and companies for tax purposes. PAN is used for tracking all financial transactions that are subject to tax and is mandatory for opening bank accounts, filing tax returns, and making certain financial transactions.
TAN: TAN is a 10-digit alphanumeric number that is mandatory for deductors and collectors of tax. It is used for the purpose of deducting and collecting taxes. TAN is required to be quoted in all TDS/TCS returns, TDS/TCS payment challans and all TDS/TCS certificates.
In summary, PAN is a unique identification number for tracking financial transactions for tax purposes, and TAN is a unique identification number for deducting and collecting taxes. A company or LLP must have a PAN to conduct business and TAN is required to deduct TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) on behalf of the government.
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