Difference between DSC, TIN TAN, DIN, PAN, and GSTIN

DSC, TIN, TAN, DIN, PAN, GSTIN: If you are an entrepreneur, who is trying to start his or her own business in India, then you need to be aware of legal terms associated with it. Most businesspeople get tired of listening to words and letters such as DSC, DIN, TAN, PAN, TIN, GSTIN and so on. Sometimes it is hard to keep up with the barrage of letters that follow. However, everyone needs to know what all these mean before starting on their own venture. 

What is TAN –Tax Deduction or Collection Account Number?

TAN or Tax Deduction and Collection Account Number in the simplest definition is a unique 10-digit alphanumeric number issued by the income tax department to people responsible for deducting tax at source (TDS) or collecting tax at source (TCS) under section 203A of the Income Tax act. It is quoted in all TDS and TCS returns and challans for payment of TDS and TCS. 

TDS is essentially aimed at collecting tax at source of income by the government. For instance, an employer deducts the TDS from the employee’s salary based on his/her net taxable salary and deposits it into the income tax department. Likewise, it is deducted on rent, brokerage, commission, rent, and more.

TCS is a certain tax amount added to the sale price of specified goods such as liquor, motor vehicle exceeding Rs 10 lakh, minerals like ignite and coal, forest produce, jewellery more than Rs 5 lakh, etc. The amount is collected by the seller of such goods from buyers and paid as tax to the government. 

Failure to have a TAN can attract a penalty of Rs 10,000. The fee for a TAN application is Rs 65 (Rs 55 application charge and 18 per cent GST). 

Read Also: TDS Rate Chart for FY 2023-24 – AY 2024-25 – Income Tax

What is DIN – Director Identification Number?

DIN or Director Identification Number is a unique identification number allotted to an individual who is appointed as a director of a company. A person looking to become a director in an existing company has to file form DIR-3. The form has to be digitally signed by the applicant and verified digitally by the company secretary of the company or by the managing director or director or CEO or CFO of the company in which the applicant wants to be the director.  

On the other hand, to become a director in a new company, the person has to apply for DIN through SPICe eform at the time of incorporation of the company. SPICe stands for Simplified Proforma for Incorporating a Company Electronically and as the name suggests is used for registering a company. 

Since DIN is specific to a person, there is no requirement for a separate DIN if the person is a director in multiple companies. DIN is required while filing returns or any information about the company shared under legal guidelines. The application fee for DIN is Rs 500.

Read Also: GST Suspension reasons: How to activate the GST Registration suspended

What is DSC- Digital Signature Certificate?

DSC is a Digital Signature Certificate or simply the digital copy of a physical or paper certificate and serves as proof of identity of a person for a certain purpose, for instance, a driving license identifies a person who is eligible to drive in a country legally.

Similar to how handwritten signatures are used to verify physical documents, DSCs act like digital signatures to validate digital transactions such as incorporating a company, online filing of income tax return, filing of annual returns, e-tenders and more. Digitally signing documents also becomes important with the growing use of various e-forms for different purposes. 

According to the corporate affairs ministry’s FAQs on DSC, Class 2 DSCs are required by enterprises to verify a person against a trusted, pre-verified database while Class 3 DSCs require the person to present himself or herself in front of a Registration Authority (RA) and prove his/ her identity.

In contrast, Class 1 DSCs only verify the name and email address of the individual. The certifying authorities are authorized to issue a DSC with a validity of one or two years. 

What is TIN – Tax Identification Number?

TIN was the Tax Identification Number also known as VAT or sales tax number allotted by the commercial tax wing of every state government required for interstate trade or the sale and purchase of goods between states. TIN was replaced by Goods and Services Tax Identification Number (GSTIN) after the implementation of GST in the country.

Enterprises doing interstate transactions are required to have GSTIN in the interstate sale and purchase of goods. GSTIN registration is mandatory for businesses who earlier had TIN or VAT registrations.

Read Also: GST Practitioner – Step by Step guide, eligibility, duties

What is GSTIN – Goods and Services Tax Identification Number?

Since 1st July 2017, every company or product which used to pay VAT or TIN has had to procure a registration under the new GST regime. Furthermore, every business or company involved in the buying and selling of goods, which is worth over INR 20 lakhs or INR 10 lakhs in certain special cases, must sign up for GST. Every business which has signed up for GST gets a GSTIN allotted to it.

Read Also: GST Registration – limit, applicability, documents, changes

What is PAN – Permanent Account Number?

The PAN is a unique ten-digit alphanumeric number that is used to identify every single taxpayer in India. This number applies to every individual, business, foreigner, trust, company, and HUF in India. It is issued by the Income Tax Department of India and is an important document that also serves as an ID proof. Any individual who wishes to start their own company must have their own valid PAN card mandatorily. Furthermore, this card is used by the IT Department to keep track of all financial transactions made, and the taxable component of those transactions. Also, this PAN card is now required to carry out large cash deposits, purchasing immovable assets and obtaining loans.