A unique alphanumeric TAN Number
A TAN (Tax Deduction and Collection Account Number) is a unique alphanumeric code comprising ten digits, assigned by the Income Tax (IT) department to individuals or entities entrusted with the task of deducting or collecting tax. As per Section 203A of the Income Tax Act, 1961, it is mandatory to include the TAN on all returns related to Tax Deducted at Source (TDS) or Tax Collected at Source (TCS).
Who is Eligible to Apply for TAN?
Every individual or entity entrusted with the responsibility of Tax Deduction at Source (TDS) or Tax Collection at Source (TCS) must obtain a TAN. It is compulsory to mention the TAN in all TCS or TDS transactions, including electronic TCS/TDS returns, TDS/TCS payment challans, and TDS/TCS certificates.
What Is TAN Number?
TAN, or Tax Deduction and Collection Account Number, is a unique 10-digit alphanumeric code issued by the Income Tax department. Individuals or entities involved in collecting or deducting tax at source (TCS and TDS) are eligible to obtain a TAN. The TAN number format typically comprises 4 alphabets followed by 5 numbers and ends with 1 alphabet (for example, ABCD12345E). The first three alphabets represent the jurisdiction code, while the fourth denotes the deductor’s name.
Under Section 203A of the Income Tax Act of 1961, it is mandatory to include your TAN number on all TDS returns. In compliance with Indian tax regulations, TAN serves as a vital component for tax compliance mechanisms. It is utilized for deductions such as salary, dividends, or interest and must be mentioned in TCS and TDS returns, challans, payments, and certificates. Failure to adhere to this requirement may result in a significant penalty of Rs. 10,000.
Understanding the Importance of a TAN Number
Individuals or entities obligated to acquire a TAN will encounter challenges when filing tax returns if they fail to apply for it. Not quoting the TAN number in returns or documents may lead to a penalty of Rs. 10,000. The TAN must be mentioned in the following documents:
- TDS or TCS statements or returns.
- Challans for TCS or TDS payments.
- Submission of TDS or TCS certificates.
- Collection or submission of various IT-related forms.
Understanding TAN:
How to Obtain Your TAN Number and Download the TAN Certificate
The TAN holds significant importance for every taxpayer in India. It consists of a 10-digit alphanumeric identity assigned to individuals or entities responsible for collecting or deducting taxes at the source. Obtaining a TAN is mandatory for both individuals and businesses to facilitate seamless day-to-day operations.
When filing various documents such as payment challans, certificates, Annual Information Returns, TDS (Tax Deducted at Source), and TCS (Tax Collected at Source), it is imperative to provide your TAN number. TIN (Taxpayer Identification Number) facilitation centers will not accept filed returns unless the TAN number is provided. Additionally, banks will refuse to accept TDS and TCS challans without a valid TAN number.
Structure of TAN
The TAN, characterized by its ten-digit alphanumeric nature, adheres to a distinct structure:
- The initial four digits comprise letters – The first three letters signify the jurisdiction where the TAN is granted, while the fourth letter represents the initial of the entity or individual seeking the TAN.
- The subsequent five digits consist of numerical values – These numerical digits are uniquely generated by the system.
- The final digit is a letter at the conclusion – The last letter is a unique character generated by the system.
Process of TAN Application
There are two modes available for applying for a TAN:
OFFLINE
Applicants have two options for applying for a TAN:
- Fill and submit Form 49B (Application for allotment of tax deduction and collection account number) to any TIN-Facilitation Center (TIN-FC) of Protean, accompanied by the necessary fees for TAN allotment.
- Download the TAN application from the NSDL website, complete the form, and submit it along with the required fees to TIN-FC.
- For in-person TIN applications, there is no requirement to provide any supporting documents to the IT department.
ONLINE
Individuals can opt for an online application for TAN through the NSDL website. Follow these steps:
- Read the guidelines carefully given on the website.
- By following the provided instructions, you can complete the online TAN application form.
- Submit the completed form online.
- Upon submission, an acknowledgement number will be generated.
- Print the acknowledgement number and dispatch it to the NSDL office located in Pune.
- The required fees can be paid 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 to NSDL. NSDL will then send the TAN details to the applicant’s provided address in Form 49B or via email.
