A TAN (Tax Deduction and Collection Account Number) is a ten-digit alphanumeric number issued by the Income Tax (IT) department to all persons responsible for collecting or deducting tax. Under Section 203A of the Income Tax Act, 1961, it is compulsory to quote TAN on all TDS or TCS returns.
Who Should Apply for TAN?
TAN should be obtained by every person responsible for Tax Deduction at Source (TDS) or Tax Collection at Source (TCS). It is mandatory to quote TAN in all TCS or TDS transactions, including any e-TCS/TDS return, TDS/TCS payment challan and TDS/TCS certificates.
Importance of TAN Number
Any person required to obtain a TAN will face difficulty filing tax returns when he/she does not apply for it. Failure to quote the TAN number in returns or documents will result in a penalty of Rs.10,000. TAN should be quoted in the following documents:
- TCS or TDS statements/returns.
- Challans for TDS or TCS payments.
- Submission of TCS or TDS certificates.
- Collection or submission of a wide variety of IT-related forms.
Structure of TAN
The TAN, being a ten-digit alphanumeric number, has a unique structure. The structure of TAN is as follows:
- The first four digits are letters – First three letters represent the jurisdiction where the TAN is issued. The fourth letter is initial of the entity or individual applying for the TAN.
- The next five digits are numerical – The numerical in the middle are unique numbers generated by the system.
- The last digit is a letter at the end – The last one letter is a unique letter generated by the system.
TAN Application Process
There are two modes for applying for a TAN:
- Offline
The applicant should fill and submit Form 49B (Form of application for allotment of tax deduction and collection account number) to any TIN-Facilitation Center (TIN-FC) of Protean with the required fees for allotment of TAN. An applicant can also download the TAN application from the NSDL website and submit the filled form along with the fees to the TIN-FC. In the case of an in-person TIN application, there is no need to furnish any supporting documents to the IT department.
- Online
Applicants can apply online for TAN through the NSDL website. Applicants should read the instructions, fill the online form and submit it. After submission of the form online, they will receive the acknowledgement number. They must print the acknowledgement number and send it to the NSDL office at Pune. They can pay the required fees online or through a demand draft or cheque.
Once the IT department receives the TAN application, they will verify the details and issue the TAN of the applicants to NSDL. The NSDL will send the TAN details to the applicant’s address provided in Form 49B or send an email with the TAN details.
TAN Application Fees
The processing fee for the TAN application is Rs.65 (including Goods and Service Tax).
TAN Search
The taxpayers can view the TAN of the tax collector or deductor from the e-filing portal. The taxpayers should click on the ‘Know PAN Details’ option on the homepage under the ‘Quick Links’ section. They need to select the category of the deductor, enter the deductor’s name, state, and taxpayer’s mobile number and click on the ‘Continue’ button.
Next, the taxpayers need to validate with OTP, and a list of records that matches the deductor’s name will be displayed. When the taxpayers click on the deductor’s name, they can view the deductor’s basic and AO details.