written by Khatabook | July 13, 2021

What Is The Difference Between TIN, VAT, PAN, DSC and DIN

Whether you are running a business or an employee filing an income tax return every year, paperwork is a must. Incorrect or missing paperwork can lead to mistakes. So, it is important to understand terms such as TAN, VAT, TIN, etc. 

Why Should You Learn The Difference Between TIN, DIN, VAT, DSC, PAN and TAN?

You need to understand these terms because they help in the easy functioning of the business and help to file taxes and manage finances. These are as important as earning money through your business. 

TIN (Tax Identification Number)

The TIN full form is Tax Identification Number. It is a unique number given to every business in India by the Commercial Tax Department. The following documents are required to apply for a TIN:

  1. 5 Passport size photos of the owner
  2. Owner's proof of identity
  3. Owner's proof of address
  4. Business's proof of address
  5. Owner's PAN card
  6. Reference or Security proof

Relevance of TIN

  • Through a unified platform, tax-related details are made available and integrated into the system. 
  • It helps in the identification of assets.
  • Export, trade, manufacturing businesses that deal with goods and services require VAT and TIN number for both purchase and sale of goods and services. However, keep in mind that GST has replaced VAT since 1st July 2017.

Also Read: 10 Best Wholesale Business in India 2021-22

TAN- Tax Deduction and Collection Account Number

TAN full form is Tax Deduction and Collection Account Number. TAN is an alphanumeric, 10 digit number. TAN number is mandatory to be quoted in all TDS returns, payments and any other communication with the income tax department. 

As per the Income Tax Act 1961, it is mandatory for all individuals’ liable to deduct TDS to quote this TAN Number. You must use it in all communications regarding TDS with the Income Tax Department, otherwise a penalty of Rs. 10,000 has to be paid. TDS Returns and Payments would not be received by the Banks if TAN No. is not quoted. People usually confuse the full form of TAN and the full form of TINTIN number full form is Tax Identification Number and TAN number full form is Tax Deduction and Collection Account Number. 

What is the difference between TIN and TAN?

Tax Identification Number is an eleven digit unique code allotted to businesses to track Value Added Tax transactions. Tax Deduction Account Number is a ten digit distinct code mainly for simplifying collection and deduction of taxes at source.

How to apply for TAN online?

1. Log onto the TIN-NSDL website, https://www.tin-nsdl.com/, to apply for TAN online. 

2. Click on Services and then on the ‘Apply Online’ option. You can then choose the ‘New TAN’ option. This will open the online form to fill up. The portal also allows users to make a correction or change already inserted data in case of a mistake by the user. 

3. The online form will have instructions that you must read carefully before proceeding further. After providing all the necessary details, there is an option of signing digitally and giving a declaration. Finally, click on the submit button to ensure submission of the form, and the user will receive an automated email. 

VAT (Value Added Tax)

The full form of VAT is Value Added Tax. It replaced the Sales Tax in 2005. It was a multi-stage indirect tax charged on the sale of goods. It was replaced by the GST (Goods and Services Tax) in 2017. 

PAN (Permanent Account Number)

PAN is a unique 10-digit alphanumeric number issued to taxpayers by the Income Tax Department. All the tax-related information and transactions are recorded against this document by the department. PAN also acts as an important identity proof for individuals. 

Thdifference between TAN and PAN is that while PAN acts as a universal identification code for financial transactions, TAN is for the collection and deduction of tax at the source. The issuing agency for both is the income tax department. Permanent Account Number (PAN) is the unique identification number to file IT returns, usually for salaried people or any other person who receives taxable income. At the same time, TAN is the unique identification number of the tax deductors authorized to deduct TDS or collect TCS.

DSC (Digital Signature Certificate)

You can file documents online, and DSC is used to establish one's identity for doing the same. It is the digital equivalent of handwritten signatures with extra data attached electronically to the document. There are three different types of Digital Signature Certificates. 

  • Type 1: This kind of Digital Signature Certificate confirms the user's name and email address within recognized databases. 
  • Type 2: This kind of Digital Signature Certificate is used to file Value Added Tax (VAT) or Goods and Services Tax, Registrar of Companies or Income Tax Returns and Documents. 
  • Type 3: This kind of Digital Signature Certificate is used for e-tendering that includes submission of a bid document, evaluation of tenders, registration of suppliers and downloading a contract form. 

DIN (Direct Identification Number) 

DIN is an eight-digit unique identification number allotted by the central government to an already appointed director or an individual expected to become a director in a company. It is allotted along with a unique code to create a database of all directors. It also helps to confirm the existence of the director in companies and avoid financial scams within organizations.

Difference between TIN, PAN and TAN

Factor

PAN

TAN

TIN

Cost of Applying

Rs 107 (Address inside India)and Rs 989 (Address outside India)

Rs 55 plus taxes

Varies from State to State

Numbers that can be owned

One

One

One

Required Documents

ID proof, address proof, age proof and passport size photographs

None

Registration proof, PAN, ID proof of owner etc. 

Form used for applications

49A for Indians and 49AA for foreigners

49B

Depends from one state to another. 

Fines

Ten Thousand Rupees

Ten Thousand Rupees 

Depends from one state to another.

Laws Applicable

Section 139 A of the IT Act of 1961

Section 203A of the Income Tax Act of 1961

Different states have different Acts under which TIN is applicable

Who can own?

Every taxpayer

Every individual or entity who as to collect or deduct tax at source

Any trader or dealer who is liable to pay VAT

Issuing Agency

Income Tax Department

Income Tax Department

Commercial Tax Department of respective states

Difference between DSC and DIN

DSC

DIN

Digital authorisation for online filing of certain documents and transactions. 

It is a unique identification number exclusively for the company’s existing directors or soon to be directors. It entails their personal information.

DIN is not a prerequisite to avail DSC

The individual should have DSC to avail of DIN

Directors, Auditors, Company secretaries, bank officials and other authorized organisations can apply for DSC.

Only existing directors and future directors can apply for DIN.

Also Read: Increase Business Returns by 3X Using Khatabook App

Conclusion

As a business or someone filing tax returns, the right documents are key to a proper submission. Understanding the application procedures, definitions, TIN number, TAN number meaning, usage of DSC and DIN etc., will help in the proper filing of returns. It also saves time while signing contracts or agreements with third parties, so being familiar with these terms is important.  

FAQs

What is the format of a PAN?

The format of a PAN is ABCTY1234D. It is an alphanumeric sequence. The alphabetic characters can range from AAA to ZZZ. 

Is it mandatory to mention a permanent residential address while filing the TIN application?

There is a provision to mention the residential address by the states. However, there have been instances where VAT inspectors have cancelled applications during the verification process for the same. Therefore, rules can vary from state to state, and it is important to read the instructions carefully. 

Is my security deposit refundable? Can I skip paying for it?

Yes, it is refundable. If you cancel your registration, the money is refunded to your source of payment. There are a few options for getting a waiver, but that depends from case to case. 

Are there separate TANs needed for TDS and TCS?

There is no requirement to create multiple applications for TCS and TDS, as you can use a single TAN Number for both. It is illegal to have or use more than one TAN for individuals or entities. 

Can I hire an agent or expert to file taxes?

You can hire professionals such as Chartered Accountants so that they can file a tax return for you. They charge a fee for the same. 

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