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Learn how to apply for a TAN (Tax Deduction and Collection Account Number), a 10-digit alphanumeric identifier issued by the Income Tax Department of India. TAN is essential for entities required to deduct or collect tax at source. Discover the application process and key details about obtaining your TAN number.
5 May 2024
Afinthrive Advisory
Purpose of TAN:
TAN is used to track tax deducted or collected at source by various entities as per the provisions of the Income Tax Act, 1961. It helps the Income Tax Department monitor compliance with tax deduction and collection obligations.
Alphanumeric Code:
TAN is a 10-character alphanumeric code in the format: ABCD12345E, where the first four characters are letters (A-Z), followed by five numerals (0-9), and ending with a letter (A-Z).
Mandatory Requirement:
TAN is mandatory for entities required to deduct or collect tax at source under the Income Tax Act. It is applicable to entities such as companies, firms, individuals, government departments, and others engaged in specified transactions.
Entities Covered:
Entities required to deduct tax at source (TDS) on payments such as salary, interest, rent, commission, or fees are required to obtain TAN. Similarly, entities collecting tax at source (TCS) on sale of specified goods or services are also required to obtain TAN.
Application for TAN:
TAN can be obtained by applying online through the NSDL (National Securities Depository Limited) or UTIITSL (UTI Infrastructure Technology and Services Limited) websites or authorized TAN facilitation centers. The application can be made using Form 49B along with the necessary documents and fees.
Documents Required for TAN Application:
Documents required for TAN application include proof of identity (PAN card, Aadhaar card, passport, etc.), proof of address (Aadhaar card, utility bill, etc.), and other documents as specified by the Income Tax Department.
Processing and Issuance of TAN:
Once the TAN application is submitted along with the required documents and fees, it is processed by NSDL or UTIITSL. Upon verification of the details provided, a unique TAN is generated and issued to the applicant.
Validity of TAN:
TAN once allotted is valid for a lifetime and remains unchanged even in case of change in business details or ownership. However, entities are required to intimate the Income Tax Department regarding any changes in TAN-related information.
Reporting and Compliance:
Entities holding TAN are required to deduct or collect tax at source as per the applicable rates and provisions of the Income Tax Act. They are also required to file TDS/TCS returns, issue TDS/TCS certificates, and comply with other reporting requirements.
Verification of TAN:
TAN details can be verified online through the Income Tax Department’s TAN verification portal by entering the TAN number and captcha code.
TAN plays a crucial role in the tax administration system of India and is an essential requirement for entities involved in tax deduction and collection at source. It helps ensure transparency, accountability, and compliance with tax laws.
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It is mandatory to quote TAN on TDS returns and challans. It is also required to be quoted in all correspondences with the IT Department.
Once a TAN is issued, it is valid for lifetime. However, TDS Filings must be made quarterly on the 31st day of July, October, January, and May. Non-filing of TDS filings within the due date will attract a penalty.
You can have multiple TAN for a single PAN. You can apply for different PAN for different branches of the same company.
Here is the check list of documents required.
Get Answers to your most asked questions.
TAN is a 10-digit alphanumeric number allotted by the Income Tax Department to persons who are required to deduct or collect tax on payments made by them under the Income Tax Act, 1961. It is mandatory for deductors and collectors of tax to quote TAN in all communications related to tax deductions and collections.
Any person or entity responsible for deducting or collecting tax at source is required to obtain TAN. This includes individuals, companies, firms, government departments, and other entities making specified payments subject to tax deduction or collection.
TAN is required for various payments subject to tax deduction or collection at source, including salaries, interest, dividends, rent, professional fees, contractual payments, and payments to contractors or subcontractors exceeding specified thresholds.
TAN can be applied for online through the NSDL-TIN website (https://www.tin-nsdl.com/services/tan/tan-index.html) or offline by submitting Form 49B to authorized TIN facilitation centers. The application should include details such as the applicant’s name, address, PAN, and nature of payment.
The documents required for TAN application include proof of identity (PAN card, Aadhaar card, passport, etc.) and proof of address (utility bill, passport, driving license, etc.) of the applicant.
The applicant needs to fill out Form 49B with the required details and submit it along with the supporting documents to the designated TIN facilitation center or online through the NSDL-TIN website. Upon verification, TAN will be allotted and communicated to the applicant.
Yes, a processing fee is applicable for TAN application. The fee varies depending on whether the application is made online or offline and the mode of payment chosen by the applicant.
TAN is typically allotted within a few days to weeks from the date of submission of the application, subject to verification and approval by the Income Tax Department.
TAN once allotted is valid for a lifetime and remains unchanged even in case of changes in the name or address of the deductor or collector. It is essential to quote the TAN correctly in all tax-related transactions and communications.
Failure to obtain TAN or quoting incorrect TAN in tax-related transactions may attract penalties or prosecution under the Income Tax Act. It is mandatory for deductors and collectors to ensure compliance with TAN requirements to avoid any legal implications.
