A PAN is a 10-character number issued under Section 139A that identifies you as a taxpayer — apply in Form 49A (Indian citizen) or Form 49AA (foreign citizen). A TAN is a separate 10-character number issued under Section 203A that identifies you as a deductor of TDS — apply in Form 49B. They are not interchangeable: you file your return on a PAN and you file TDS returns on a TAN. If you have an Aadhaar with a linked mobile number, an instant e-PAN is issued free in about ten minutes on the income-tax portal.
The single most common mistake is quoting a PAN on a TDS challan. TDS returns (24Q / 26Q / 27EQ) and Challan 281 require a TAN. The only deductions that run on PAN instead of TAN are the one-off ones — 194-IA (property purchase, Form 26QB), 194-IB (rent paid by an individual/HUF not under audit) and 194M (contract or professional payments by an individual/HUF).
PAN vs TAN — What Each One Does
| PAN | TAN | |
|---|---|---|
| Governing section | Section 139A | Section 203A |
| Application form | 49A (resident) / 49AA (foreign citizen) | 49B |
| Identifies | The taxpayer | The deductor / collector |
| Used on | Income-tax return, bank accounts, high-value transactions | TDS/TCS returns, Challan 281, Form 16 / 16A |
| Format | ABCDE1234F | MUMB12345C |
| Government fee | ~Rs 107 (Indian address) | ~Rs 65 + GST |
| Penalty for default | Rs 10,000 (Sec 272B) | Rs 10,000 (Sec 272BB) |
One person can hold exactly one PAN. A business that deducts TDS needs both — a PAN for its own return and a TAN for its TDS obligations.
How to Apply for a PAN
There are three routes to a PAN. The fastest is free and needs nothing but an Aadhaar; the other two produce a physical card and are the only options if you have no Aadhaar or you are a foreign citizen.
| Route | Who it suits | Fee | Time |
|---|---|---|---|
| Instant e-PAN (income-tax portal) | Indian residents with Aadhaar + linked mobile | Nil | ~10 minutes |
| Form 49A via Protean (NSDL) or UTIITSL | Indian citizens, companies, firms, trusts | ~Rs 107 | 7–15 days |
| Form 49AA | Foreign citizens and foreign entities | ~Rs 1,017 (foreign address) | 15–20 days |
The instant e-PAN is a fully valid PAN in PDF form. A physical card can be ordered separately for a small reprint fee.
Documents by applicant type
| Applicant | Identity / address / DOB proof |
|---|---|
| Individual (resident) | Aadhaar, passport, voter ID or driving licence |
| Company | Certificate of Incorporation issued by the ROC |
| LLP / Partnership firm | LLP incorporation certificate or the partnership deed |
| Trust | Trust deed or the registration certificate of the charity commissioner |
| Foreign citizen | Passport, PIO/OCI card, or a bank statement of the country of residence |
For most individuals, PAN-Aadhaar linking is mandatory. An inoperative PAN behaves as if you had no PAN at all: TDS is deducted at the higher rate under Section 206AA, refunds are withheld, and returns will not process. If your name or date of birth differs between the two records, fix it first — see PAN correction and update.
Not sure which form applies to your entity?
Ask our tax desk →How to Apply for a TAN (Form 49B)
A TAN is needed the moment you make a payment that attracts TDS — salary, rent, contractor bills, professional fees, commission. Apply in Form 49B on the Protean (formerly NSDL) TIN portal or through the income-tax portal.
Allotment usually takes 7–10 working days. The TAN then goes on every TDS challan and every TDS return you file. Details captured at this stage — the deductor name, address and responsible person — are exactly the fields that later need a TAN correction if they change.
You need a TAN if
- You are a company, LLP or firm making any TDS-liable payment
- You are under tax audit and deduct TDS
- You collect TCS under Section 206C
You can use PAN alone if
- You are buying property (Sec 194-IA, Form 26QB)
- You are a non-audit individual/HUF paying rent (Sec 194-IB)
- You make one-off contract or professional payments (Sec 194M)
Penalties and Knock-on Effects
- Rs 10,000 under Section 272B — failing to obtain a PAN, quoting a false PAN, or holding more than one PAN
- Rs 10,000 under Section 272BB — failing to obtain a TAN or quoting an incorrect one
- TDS returns cannot be filed at all without a valid TAN, which cascades into late-filing fees under Section 234E
- Deductees lose their credit in Form 26AS and AIS, because credit is matched on the deductor's TAN
- An inoperative PAN triggers higher TDS under Section 206AA and blocks refunds
People occasionally end up with a second PAN after a name change or a lost card. Section 139A permits exactly one. Surrender the duplicate through the correction form and keep the older number — that is the one already carrying your 26AS history and your bank KYC.