TAN (Tax Deduction and Collection Account Number)

TAN is a unique 10-character alphanumeric identifier issued by the Income Tax Department of India for businesses and individuals who are required to deduct or collect tax at source. It is primarily used for the deduction or collection of tax at source (TDS/TCS) and must be mentioned in all TDS/TCS returns, payment challans, and certificates.

Who Needs to Apply for TAN?

  1. Employers: Those who deduct tax from employee salaries.
  2. Banks and Financial Institutions: Entities that deduct tax on interest or dividends.
  3. Contractors/Subcontractors: Individuals or companies involved in contracts, deducting tax from payments made.
  4. Government Bodies or Corporates: That collect taxes at source (TCS) on certain transactions.
  5. Others: Any person or organization deducting or collecting tax at source.

How to Apply for TAN?

  1. Online Application:

    • Visit the NSDL or UTIITSL websites to apply for TAN online.
    • Fill out Form 49B (TAN application form) and submit required documents.

  2. Offline Application:

    • Submit Form 49B to your nearest TIN facilitation center along with identity and address proofs.

Documents Required for TAN Application

  • Identity Proof: Copy of PAN card of the applicant.
  • Address Proof: Proof of address of the applicant (e.g., Aadhar, utility bills).
  • Business/Organization Proof: In case of a business or firm, incorporation certificate or partnership deed.

Uses of TAN

  1. TDS/TCS Filing: TAN is required to file TDS/TCS returns with the Income Tax Department.
  2. Tax Payments: It is used while making payments of TDS/TCS.
  3. TDS Certificates: Issued using the TAN for tax deducted at source (Form 16, Form 16A).
  4. Returns and Statements: TAN is mandatory in TDS/TCS return filings, like Form 26Q, Form 27Q.

How to Find Your TAN?

  1. TAN Number Format: A 10-character alphanumeric code in the format “AAAAA9999A”.

    • The first five characters are alphabets (representing the name of the applicant or business).
    • The next four digits are numeric (a unique sequence number).
    • The last character is an alphabetic check digit.

  2. Check TAN Details Online:

    • You can verify or retrieve your TAN on the Income Tax Department’s website or through the TIN-NSDL portal.

Penalties for Non-Compliance

  1. Failure to Apply for TAN:
    • A penalty of ₹10,000 can be levied for failing to apply for TAN.
  2. Incorrect Usage of TAN:
    • Incorrect quoting of TAN on TDS/TCS returns or payment challans can lead to rejection and penalties.

TAN and TDS/TCS Filing

When deducting or collecting tax at source, the correct TAN must be mentioned in the following:

  • TDS/TCS returns (Form 24Q, Form 26Q, etc.).
  • TDS/TCS certificates issued to employees or payees.
  • Challans used for making TDS/TCS payments.

For assistance with applying for or managing your TAN, feel free to contact AK Mehta & Associates😊

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