Tax deduction and collection account number

The structure of this 10-digit unique identifier has undergone several revisions over the years. The current structure has 4 alphabets at the start, followed by 5 numerals and ends with an alphabet again. 

The identifier has several details encoded using this combination of letters and numerals. These details are broken down as mentioned below –

• The TAN number’s first 3 alphabets represent the holder’s jurisdiction code.
• The 4th alphabet is the initial of the holder’s name. It must be remembered that a TAN number can be allotted to an individual or an enterprise, like a company or a firm, of any sort.  In such an instance, the company or organisation is treated as an individual.
• The next 5 numbers are exclusive identifying numerals with no added significance.
• Finally, the last alphabet acts merely as a unique identifying entity. 

The structure can be better understood with two examples, albeit fictional ones.

1. If a certain Mr Mahesh from Rajasthan files tax returns at source, his TAN number will look like – RAJM99999B

Where, 

• RAJ indicates the jurisdiction which, in this example, is the state of Rajasthan.
• The 4th alphabet, ‘M’, refers to the first character of its holder’s name.
• The next 5 numerals and the last letter serve as a unique ID.

1. When a certain Delhi-based firm, XYZ Pvt Ltd, is allotted a TAN, it may look like this – DELX12345M

Here again, 

• ‘DEL’ indicates that any legal issues will be dealt with only by competent jurisdictional authorities within the city of New Delhi.
• ‘X’ is the first character of the company’s registered name.
• The remaining letters serve the same purposes as the previous example.

The Relevance of this Number

It is imperative that you know your TAN no. Without it, you are certain to face a series of difficulties while filing your tax returns.  

Following are some reasons why holding a Tax Deduction and Collection Account Number is necessary. Note that all these provisions are clauses and conditions under Section 203A of the IT Act, 1961. 

• You cannot file TCS or TDS statements if you do not have a TAN.
• This number is required when you seek challans for TDS or TCS payments; without it, you cannot procure these documents.
• Unless you can quote your TAN number, you will not be able to submit either TDS or TCS certificates. This may result in problems in the IT documentation process and plenty of persisting issues later. 
• Lastly, without the Tax Deduction and Collection Account Number, it is impossible to collect or submit a wide variety of IT-related forms.

Here, it is crucial to note that there is an important exception when it comes to obtaining and quoting the TAN. The number is not mandatory for any individual who deducts tax under Section 194-1A of the IT Act of 1961.