Electronic Tax Identification Number in India: PAN, TAN, and GSTIN Explained

If you’re a foreign business looking to expand into India, hire Indian contractors, or sell digital services to Indian customers, you will likely be asked for your “Indian Tax ID”.

Unlike some countries that issue a single, universal electronic tax identification number, India operates a multi-tiered identification system. Depending on your activities, you may need one, two, or all three of the primary tax IDs: PAN, TAN, and GSTIN.

1. PAN (Permanent Account Number)

What it is: A 10-character alphanumeric identifier issued by the Income Tax Department. It is the absolute foundation of corporate identity in India. Who needs it:

• Any foreign entity incorporating a subsidiary, branch office, or liaison office in India.
• Any foreign entity generating income that is taxable in India.
• Foreign companies that want to claim lower withholding tax (TDS) rates under a Double Taxation Avoidance Agreement (DTAA). Without a PAN, Indian payers must withhold tax at a punitive rate of 20% under Section 206AA.

How to get it: Foreign entities apply using Form 49AA.

2. TAN (Tax Deduction and Collection Account Number)

What it is: A 10-character alphanumeric number required by anyone responsible for deducting tax at source (TDS) or collecting tax at source (TCS). Who needs it:

• If your Indian subsidiary hires employees, it must deduct TDS on their salaries.
• If your Indian subsidiary pays local contractors, consultants, or landlords, it must deduct TDS.
• To deposit this deducted tax with the government, a TAN is mandatory.

How to get it: Applied for using Form 49B (usually obtained simultaneously during the incorporation of an Indian subsidiary).

3. GSTIN (Goods and Services Tax Identification Number)

What it is: A 15-character alphanumeric ID used for tracking indirect tax (GST). The first two digits represent the state code, followed by the entity’s PAN. Who needs it:

• Any Indian business (including your subsidiary) crossing the turnover threshold (usually ₹20 Lakhs for services).
• Any business making inter-state taxable supplies.
• Foreign Digital Sellers (OIDAR): If you sell SaaS or digital content to Indian consumers from abroad, you must get an OIDAR GSTIN.

The OIDAR Exception: Normally, an Indian PAN is a strict prerequisite for a GSTIN. However, under the OIDAR scheme, a foreign business can obtain a special GSTIN (starting with 99) using only their home country’s tax identification number. No Indian PAN is required.

Next Steps for Foreign Businesses

• Selling Digital Goods? If your only connection to India is selling SaaS or digital content over the internet to consumers, you just need an OIDAR GSTIN. See our OIDAR Registration Service.
• Hiring or Setting Up Shop? If you are hiring full-time staff, renting an office, or setting up an Indian Private Limited Company, you will need a PAN, a TAN, and a standard GSTIN. See our Foreign Subsidiary Incorporation Service.