Tax deduction & collection account number (TAN)

What is TAN

TAN or Tax Deduction and Collection Account Number is a unique 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax.The 10 digits of TAN represents the following:-

• The first three letters represent the jurisdiction where the TAN was issued.
•  The fourth alphabet in the TAN is the initial letter of the name of the individual or entity deducting or collecting tax.
• The remaining six characters (five numerals and the last alphabet) are system-generated.

Who allots TAN

The income tax department allots TAN. TIN-NSDL and TIN facilitation centres furnish TAN to business/firms/individuals.

What is the relevance of TAN

Under Section 203A of the Income Tax Act, 1961, it is mandatory to quote Tax Deduction Account Number (TAN) allotted by the Income Tax Department on all in the following documents, failing which, penal provisions would attract:-

• TDS statements i.e. returns
• TCS statements i.e. returns
• Statement of financial transactions or reportable accounts 
• Challans for payment of TDS/TCS
• TDS/TCS certificates
• Other documents, as may be prescribed.

How to apply for TAN

A deductor can apply for TAN online by filling out the application form for TAN from the official website of NSDL, in form 49B (for deductors who are applying for TAN for the first time). One should follow the given link for applying for the same https://tin.tin.nsdl.com/tan/form49B.html. Applicants can also submit physical TAN Application to any TIN-Facilitation Center (TIN-FC) of NSDL.

You May Also Refer :

• Using Forms 15G and 15H to save TDS on Income
• Interest for Failure to Collect/Deduct & Delayed Payment of TDS/TCS
• Due Dates for E-Filing of TDS/TCS Return FY 2019-20 | AY 2020-21

Is there any requirement to obtain separate TAN for TDS/TCS

A single TAN is to be used for both TDS & TCS. Hence, theres no requirement for multiple TAN applications. It is unlawful to hold or obtain more than 1 TAN. However, multiple TANs can be used for different branches of a single entity.

Are there any documents required for TAN application

The TAN allotment application need not be accompanied by any documents. However, if online mode is chosen, the acknowledgement generated on submission of the form, needs to be downloaded, signed and forwarded to NSDL by post.

Are there any exemptions from obtaining TAN

The requirements of obtaining TAN is not compulsory in the following cases:-

• Under Section 194-IA, for tax deducted at source while buying immovable property, PAN can be used instead of TAN.
• Undersection 194-IB tax deducted by a tenant (for home/building/land).

Can TAN be cancelled

Yes. One can get the TAN cancelled in the following situations:-

• Where duplicate TAN has been allotted
• Where TAN allotted, is no more required by the assessee/deductor.

What are the consequences for not obtaining TAN

Section 272BB(1) of the Income Tax Act,1961 provides for penalty of 10,000 for failure to obtain TAN, in case a person is required to obtain TAN.