What is the Main Purpose of TAN?

The main purpose of TAN is to track down tax deducted or collected at source (TDS/ TCS) and to file TCS/ TDS returns.

Are PAN and TAN Interchangeable?

No, PAN and TAN are not interchangeable. PAN is used to identify taxpayers and their transactions, whereas TAN is used to identify tax collectors/ deductors. Both have different complementary roles.

What are the Penalties for Not Having a PAN or a TAN When Required?

Not having a PAN or a TAN when required or misusing them attracts a penalty of INR 10,000 by the IT Department.

How Long are PAN and TAN Valid?

PAN is valid for the lifetime of the individual and entity, whereas TAN is valid as long as the entity or business collects or deducts taxes.

How to Apply for PAN and TAN?

You can apply for a PAN a filling out Form 49A (Indian citizens and NRIs) or Form 49AA (OCI, PIO, foreign citizens and entities). Additionally can apply for TAN using Form 49B.

PAN Card

PAN vs TAN: Key Differences Explained

By Ritesh Jain |Last Updated: February 19, 2026

The Income Tax Department to deduct, collect, and track taxation and financial transaction issues the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). Before starting a business, a person should know the difference between PAN and TAN. It is because when starting a business in India or engaging in financial activity to make money, these numbers help you know the compliance requirements.

Considering this, have you ever thought why banks and financial institutions ask for a PAN number? However, for salary deductions, your employer asks for a TAN number. Confused? Then, this blog post is for you. It consists of the key difference between the PAN and TAN numbers. So, read on and clear all your doubts.

Ritesh Jain(Tax Expert)

Mr. Ritesh has 20 years of experience in taxation, accounting, business planning, organizational structuring, international trade financing, acquisitions, legal and secretarial services, MIS development, and a host of other areas. Mr Jain is a powerhouse of all things taxation.

Frequently Asked Questions

A PAN or Permanent Account Number is a unique 10-digit alphanumeric identification number that is allotted by the Income Tax Department of India to individuals and entities to file tax returns and track financial transactions.

A TAN or Tax Deduction and Collection Account Number is a 10-digit unique alphanumeric number allotted by the IT Department of India to businesses and entities accountable for collecting or deducting tax at source (TCS/ TDS).

Every taxpayer, including individuals, NRIs, and entities, needs a PAN card for income tax filing and financial transactions such as buying property, opening bank accounts, or investing.

TAN is mandatory for employers, businesses, or persons who, on behalf of the government, deduct or collect tax at source.

The main purpose of the PAN is to track all financial and tax-related transactions of an individual or entity. It serves as an identity proof in the tax system.

PAN vs TAN: Key Differences Explained

Frequently Asked Questions

What is a PAN?

What is a TAN?

Who Needs a PAN?

Who Needs a TAN?

What is the Main Purpose of PAN?

PAN vs TAN: Key Differences Explained

Frequently Asked Questions

What is a PAN?

What is a TAN?

Who Needs a PAN?

Who Needs a TAN?

What is the Main Purpose of PAN?