In India, the Income Tax Department issues a 10-digit alphanumeric number to entities responsible for deducting tax at source (TDS) or collecting tax at source (TCS). This unique number is known as TAN, which stands for Tax Deduction and Collection Account Number.
As per Section 203A of the Income Tax Act, 1961, quoting TAN is mandatory on all TDS and TCS returns.
Structure of TAN Number
The TAN number follows a standardized structure comprising 10 characters:
- The first three alphabets represent the jurisdiction code of the holder.
- The fourth character is the first letter of the holder’s name (individual or entity).
- The next five digits are unique identifying numbers.
- The last character is an alphabet, acting as a distinctive identifier.
For instance, consider these examples:
- If Mr. Rajesh from Maharashtra applies for TAN, it may look like MAHR12345A, where:
- MAH represents the jurisdiction (Maharashtra).
- R is the initial of the applicant’s name.
- 12345A are unique identifiers.
- If XYZ Pvt Ltd from Delhi is issued a TAN, it may be DELY67890B, where:
- DEL represents Delhi jurisdiction.
- Y is the first letter of the company’s name.
- 67890B are unique identifiers.
Importance of TAN Number
Having a TAN number is crucial for tax compliance. Here’s why:
- Without TAN, one cannot file TDS or TCS statements.
- It is required for obtaining TDS/TCS challans.
- Quoting TAN is necessary for issuing TDS/TCS certificates.
- Without TAN, several IT-related forms cannot be submitted.
Who Does Not Require TAN?
TAN is not mandatory for individuals deducting tax under Section 194-IA, which applies to property sales.
Penalty for Non-Compliance
As per Section 272BB of the IT Act, failure to obtain or quote the correct TAN can lead to a penalty of up to ₹10,000.
Types of TAN Applications
There are two types of TAN applications:
- New TAN Application – For first-time applicants.
- Change/Correction in TAN – For updating details of an existing TAN.
The processing fee for TAN applications is ₹65 (including GST).
How to Apply for TAN?
TAN can be obtained through online and offline modes.
- Online Method (via NSDL-TIN website):
- Visit the NSDL website and complete the TAN application form (Form 49B).
- Submit the form and note down the 14-digit acknowledgment number.
- Print and sign the acknowledgment page.
- Pay the application fee through Net Banking, Debit/Credit Card, or Demand Draft.
- Offline Method:
- Obtain Form 49B from a TIN-FC center.
- Fill in the details and submit it at the center.
- No additional documents are required.
Checking TAN Status
Applicants can track their TAN status using the 14-digit acknowledgment number by:
- Visiting the NSDL-TIN website.
- Selecting ‘Know your TAN’.
- Entering the acknowledgment number and captcha.
- Clicking Submit to view the status.
Recovering a Lost TAN Number
If you forget your TAN, retrieve it online by:
- Visiting the Income Tax e-filing portal.
- Selecting ‘Know your TAN’.
- Entering the required details and verifying through OTP.
Difference Between TAN and PAN
| Feature | TAN | PAN |
|---|---|---|
| Purpose | For tax deduction & collection | For personal/business tax filing |
| Issued By | Income Tax Department | Income Tax Department |
| Structure | 10-digit alphanumeric code | 10-digit alphanumeric code |
| Required For | TDS/TCS deductions | Income tax filing & financial transactions |
| Applicable To | Entities deducting tax at source | Individuals and businesses |
| Legal Mandate | Section 203A of IT Act | Section 139 of IT Act |
| Penalty for Non-Compliance | ₹10,000 | ₹10,000 |
TAN Rectification and Cancellation
For corrections or cancellation of TAN:
- Visit the NSDL-TIN website.
- Fill out the TAN correction form.
- Submit the request online or at the nearest TIN-FC center.
Government Initiatives for Simplifying TAN & PAN
To enhance ease of doing business, the government has introduced Form INC-32 (SPICe Form), allowing companies to apply for TAN and PAN simultaneously.
Customer Support for TAN
For TAN-related queries, contact:
- NSDL-TIN Customer Care
- Income Tax Helpline
- Nearest TIN Facilitation Center (TIN-FC)
By ensuring timely application and compliance with TAN regulations, businesses and individuals can avoid penalties and streamline their tax processes effectively.
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