In any business, you often come across some three-letter acronyms such as PAN, VAT, TIN, TAN, DSC, and DIN. Here we attempt to help you understand what each of these represent, and how it is relevant for your business.
TIN or VAT: A Tax Payer Identification Number
The full form of TIN is Tax Payer Identification Number. Nowadays, it is also known as VAT (Value Added Tax) number or Sales Tax number. The respective state government and commercial tax department in each state gives out these unique eleven-digit numbers. You need to mention the unique number in all your VAT-related transactions.
The TIN number identifies dealers under the VAT registration. If you sell products or are an exporter, shopkeeper, dealer or e-commerce seller, you need a TIN number or VAT registration mandatorily for performing several such transactions.
TAN: Tax Deduction and Collection Account Number
Don’t know what is tan? The full form of TAN stands for Tax Deduction and Collection Account Number. It has ten alphanumeric digits which are allotted to companies or enterprises (i.e., the source) who deduct tax at the source, or TDS. The TAN registration is mandatory since the business would be deducting TDS from its employees and paying it to the IT department of the government. The company needs to use TAN for all its tax deductions and collections.
This is the number you may also see when you receive your Form 16 (if you are an employee) from the employer. The entire history of tax deduction made by the company to pay to the tax department can be found in this account number. In case you are an entity who is deducting tax, you will require TAN. A penalty may be incurred by those who do not possess or quote TAN number.
PAN: Permanent Account Number
Permanent Account number, otherwise popularly known as PAN, is a ten-digit alphanumeric unique identification which is issued by the department to each of the taxpayers individually. All businesses and trusts also have a unique PAN number. It is important for the IT department as it uses the number to keep an eye on all the financial transactions made by the taxpayer.
All income, debit, and credit on the individual’s account can be traced through PAN. It is required to even open your bank account, deposit high values, obtain loans or buy a property. You can also get PAN card online, if you don’t know how to apply pan card online, know it here. You will know everything like documents required for pan card and how to apply for lost card etc.
DSC: Digital Signature Certificate
The Digital Signature Certificate is nothing but a proof of identity of an individual for online filings and transactions. It is a mode of electronic authorization, to do away with physical presence. These are used mostly by the income tax department, employee provident fund, and directorate general of foreign trade. The Digital Signature Certificates are divided into three classes. While class two certificate is most popular, used to register a company or business or to file income tax returns, class three digital signature is used in order to take part in e-tender programs.
DIN: Director Identification Number
A director or future director of the company is generally issued with a unique number called the Director Identification Number. It contains all the personal information of the director or to-be director. This is obtained only by individuals and not companies. Both foreign citizens and Indians can get DIN by submitting relevant identity proof and address. Digital Signature Certificate is needed prior to applying for DIN. DIN is also needed for limited liability partnership.