Since tax paying has become an inevitable activity, you’re likely to come across terms which would simply bounce off your head. To name some of them, there are TAN, TIN, VAT, PAN etc. which are quite important for anyone irrespective of whether they are salaried individuals or a business owners. Thus, let’s take out some time to understand these terms one by one and make things easier for ourselves.
- TIN or VAT: TIN means Taxpayer Identification Number and VAT translates to Value Added Tax. Now, even though the two terms refer to different things, TIN identifies dealers, vendors etc. registered under VAT policies. Thus, these two are connected. The respective state government and commercial tax department in each state gives out these unique eleven-digit numbers.
- TAN: TAN stands for Tax Deduction and Collection Account Number. It is a ten-digit alphanumeric number allotted to companies or other non-individuals who deduct TDS. For instance, most employees employed by a registered Indian company deducts tax from their employee's salary if their income exceeds a specified threshold. This deduction can be reclaimed by filing form 16 at the time of tax filing.
Additional Read: Here’s How Corporates are Allotted their PAN and TAN in a Day
- PAN: I’m sure almost all of us reading this content is aware of what PAN is. If not, PAN stands for Permanent Account Number which is used while filing ITR. PAN is a ten-digit alphanumeric unique identification which is issued by the department of Income Tax in India to each taxpayer. Also, all businesses and trusts also have a unique PAN number.
Additional Read: Vital Documents that still Required to Link with Aadhar Card
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