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Tax Deduction Account Number (TAN)

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Tax Deduction Account Number (TAN)

What is TAN?

Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting tax at source or collecting tax at source.

Structure of TAN

First 4 digits of TAN are alphabets, the next 5 digits of TAN are numeric and last digit is an alphabet.

First 3 alphabets of TAN represent the jurisdiction code, 4th alphabet is the initial of the name of the TAN holder who can be a company, firm, individual, etc. For example, TAN allotted to Mr. Vinay of surat may appear as under:

SRT– V–55825–J

Who are liable to apply TAN?

Every person liable to deduct tax at source or collect tax at source is required to obtain TAN. It can be an individual, a Hindu Undivided Family, Partnership firms, Associations of persons, trusts, statutory, an autonomous body, a company, a branch or a division of a company.

However, a person required to deduct tax under section 194IA or section 194-IB or section 194M can use PAN in place of TAN as such person is not required to obtain TAN.

How to apply for TAN

There are two modes for applying for TAN:

  • OFFLINE – An application for allotment of TAN is to be filed in Form 49B in duplicate and submitted to any TIN-FC.
  • ONLINE — Online application for TAN can be made from the website of NSDL TIN website.

Where it is compulsory to quote TAN?

It is compulsory to quote TAN in following things:

  1. TDS/TCS return (including any e-TDS/TCS return),
  2. TDS/TCS payment challan,
  3. TDS/TCS certificates,
  4. Annual Information Return and other documents as may be prescribed.

Penalty for non-compliance

If a person fails to apply for TAN or do not quote the TAN in the specified documents, then the person will get a penalty of Rs.10,000.

Frequently Asked Questions

Q- Is it require to apply for different TAN if a deductor has to deduct tax from different types of payments like salary, interest, professional service, commission, etc.?

A- No, TAN once allotted can be used for all type of deductions. It can also be used in case tax is being collected at source.

Q- Can branches of companies/banks have separate TANs?

A- Yes. In such a case, the name and location of branch or the designation of the person responsible for deducting/collecting tax, whichever is applicable, should be clearly given in the application for allotment of TAN.

Q – Who will allot TAN?

A- TAN is allotted by the Income Tax Department on the basis of the application submitted to TIN Facilitation Centres (TIN-FC) managed by NSDL. NSDL will intimate the TAN which will be required to be mentioned in all future correspondence relating to TDS/TCS.

Q- Is it legal to possess two TAN by same assessee?

A- It is illegal to possess or use more than one TAN. Different branches/divisions of an entity may, however, have separate TAN.

Q- What we have to do if we have been allotted a multiple TAN?

A- In case duplicate TAN has been allotted, an application should be made for cancellation of the TAN which has not been used. Application for cancellation of TAN is to be made in the “Form for Changes or Correction in TAN”.

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