TAN stands for Tax deduction and Collection Account Number. It is a 10 digit alphanumeric number that is required to be obtained by all persons who are responsible for deducting and collecting tax at source. It is mandatory to quote TAN in TDS/TCS return (including any e-TDS/TCS return), in any TDS/TCS payment challan, TDS/TCS certificate, and other prescribed documents. TAN number or registration is very important for the businesses deducting tax at source and mandatory to be parroted in TCS and TDS return. If an individual is failed to do so may attract a heavy penalty of up to Rs. 10,000. If TAN is not quoted TDS return and payments will not be received by banks.
1. TAX Deposit
You must quote TAN in documents when you’re depositing tax as TAN is used for deductions such as salary, interest, or dividends.
You must undertake these steps when depositing the tax
Use challan type 281 for the deposit of tax collected or deducted at source.
It is mandatory to quote the correct 10 digit TAN along with the name and address of the deductor on each challan that is used for depositing tax.
You can use separate challans for indicating separate sections and correct nature of payment code in the relevant columns.
2. Unique identification
TAN (Tax deduction and collection account) is a unique identification number obtained by those who are deducting and collecting tax at source, on the behalf of the Income-tax department. TAN makes every individual tax deductor or collector identifiable.
3. Issuance of TDS certificates
TDS certificates must be issued by entities or individuals deducting or collecting tax at source. The issuance of this certificate is important so that the taxpayer knows how much tax he has paid. This certificate helps the taxpayer to understand the amount of tax has been paid and deposited with the government.
4. Lifetime validity
Once TAN is issued it is valid for a lifetime and you can cancel it using ‘TAN correction Form'. It is mandatory to have a unique TAN, if you are found with multiple TAN, you must surrender the one that is not in use.
The application of TAN needs to be filled in form 49B online at the nearest TIN facilitation centers. It should be allotted by the Income-tax department to the applicant. TAN could be applied by making an online application or a person by visiting the Income-tax department.
The application of TAN can be made using form 49B. There is no need for any supporting document in case of an in-person application. However, in the case of an online application, an acknowledgment received after the application submitted in Form 49B should be attached as proof.
An acknowledgment would consist
Unique acknowledgment number of 14 digits
Name as well as contact details of the applicant
Status of applicant
Space for signature
Details with respect to payment
1. What is TAN?
TAN stands for Tax deduction and Collection Account Number. It is a 10 digit alphanumeric number that is required to be obtained by all persons who are responsible for deducting and collecting tax at source. It is mandatory to quote TAN in TDS/TCS return (including any e-TDS/TCS return), in any TDS/TCS payment challan, TDS/TCS certificate, and other prescribed documents.
2. Who should apply for TAN?
Every person who is liable to collect and deduct tax at source is required to obtain TAN. A person required deducting tax under section 194lA or section 194-lB can use PAN instead of TAN. Such a person does not require obtaining TAN.
3. What is the procedure for obtaining TAN?
An application for the allocation of TAN is filled in Form 49B and submitted to any TIN Facilitation centers (TIN-FC). Alternatively, you can also apply for TAN online at NSDL-TIN website.
4. Who will allot TAN?
TAN will be allotted by the Income Tax Department on the basis of an application submitted by the applicant to TIN Facilitation centers managed by NSDL. NSDL will intimate the TAN to the applicant at the same address provided in the application.
5. Can an application for TAN be made on plain paper?
No, it cannot be made on plain paper rather it can be made on Form 49B also the application form can be downloaded from the website of Income Tax department or NSDL or can be obtained from any other source. Application is also available at TIN Facilitation centers.
6. What are the documents required to be submitted along with the TAN application?
There is no document required to be accompanied by the application for allotment of TAN. However, the acknowledgment which is being generated after filling up the form should be forwarded to NSDL.
7. What will happen if the incomplete form 49B is submitted?
If you are submitting the form at TIN-FC, TIN-FC will guide you incorrectly filling up Form 49B. An incomplete application will not be accepted.
8. What is the fee for filling up the application for TAN?
Fee for filling up the TAN application is Rs.65 + GST as applicable (Fee for the application may vary from time to time)
9. Can a person quote PAN in place of TAN?
No, a person can never quote PAN in place of TAN. Purposes for which TAN and PAN are allotted are different. TAN is a unique identification number allotted to a person who is deducting and collecting Tax at a source on behalf of the Income Tax Department. Whereas, PAN is a unique number allotted to assesses like a company or an individual, etc
10. What should be done if a Duplicate TAN has been allotted to a person?
In case of Duplicate TAN is allotted to a person, an application may be made for the cancellation of TAN. An application is to be made in the "Form for changes or correction in TAN" which can be downloaded from the NSDL Website or any other source. It can also be available at TIN Facilitation centers.