The full form of TAN is Tax Deduction or Collection Account Number. Every person liable to deduct TDS or TCS must apply for TAN.
As per section 203A, this 10-digit alphanumeric number must be quoted when you become liable to either Deduct or Collect tax (i.e., liable to deduct TDS or collect TCS), make payment through challan, or file TDS returns or issue a Tds certificate to the deductee.
What is TAN?
ax Deduction or Collection Account Number is referred to as TAN. The Income Tax Department provided the 10-digit alphanumeric number. TAN is available to everyone who collects or deducts tax at source (TCS and TDS). A TAN number, such as PDES03028F, is made up of four alphabets, five numbers, and one alphabet. It is structured as follows:
The city where TAN has been assigned is represented by the first three alphabets of TAN
The first letter of a person’s name is represented by the fourth character of TAN
The last alphabet and all five of the numbers are automatically created characters by the algorithm.
Your TAN number is a requirement under Section 203A of the Income Tax Act of 1961 for all TDS returns. According to Indian law, TAN is necessary for tax compliance processes. All TDS and TCS forms, challans, payments, and certificates must include the TAN number. It is utilised for deductions such as salary, dividends, or interest. If this isn’t done, there would be a steep penalty of Rs. 10,000.
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 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.
FAQs
What is the TAN full form?
he full form of TAN is Tax Deduction or Collection Account Number. It is required by specified persons who must deduct or collect tax as per the provisions of the income tax act in India.
Is separate TAN required for TDS and TCS?
No, a single TAN can be used both for TDS and TCS.