PAN, or permanent account number, is a unique 10-digit alphanumeric identity allotted to each taxpayer by the Income Tax Department under the supervision of the Central Board of Direct Taxes. It also serves as an identity proof. PAN is mandatory for financial transactions such as receiving taxable salary or professional fees, sale or purchase of assets above specified limits, buy mutual funds and more. TAN No is a ten digit alphanumeric number thats allotted to those who are supposed to deduct tax at source or TDS. TAN number or TAN registration is very important for businesses deducting tax at source and is required to be quoted in TDS or TCS return. Failure to apply TAN when required can attract a penalty.
Permanent Account Number (PAN) was introduced by the Indian Income Tax Department in order to facilitate easy retrieval of information and matching information relating to an assessee's investment, payment of taxes, raising of loans, assessment, tax demand, tax arrears etc. The Permanent Account Number (PAN) is unique, national, and permanent. It is unaffected by a change of address, even between states in India. As a universal identification key the PAN helps to monitor all financial transactions of high net worth individuals and thereby indirectly prevent tax evasion. Pan Card is issued by the Indian Income Tax Department under the supervision of the Central Board for Direct Taxes (CBDT) and is almost equivalent to a national identification number. It also serves as an important ID proof. From 1 January 2005 it has been made mandatory to quote the Permanent Account Number (PAN) on challans for any payments due to Income Tax Department. It is also compulsory to quote PAN in all documents pertaining to most financial transactions
All existing assessees or taxpayers or persons who are required to furnish a return of income, either on behalf of self or others, must obtain PAN. Any person, who intends to enter into economic or financial transactions where quoting PAN is mandatory, must also obtain PAN.