Quick Summary:

TAN (Tax Deduction Account Number) surrender is required when businesses or individuals no longer need to deduct tax at source. This guide explains the reasons for surrendering TAN, the step-by-step process, necessary documents, and the implications of not surrendering when required.

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TAN Surrender: Process, Reasons, and How to Surrender Your TAN Number

Learn everything about TAN Surrender – why it is required, the process of surrendering your TAN number, and the steps to follow to ensure proper compliance.

5 May 2024

Afinthrive Advisory

TAN Surrender: Process, Reasons, and How to Surrender Your TAN Number

TAN (Tax Deduction and Collection Account Number) is a unique identification number required for businesses or individuals responsible for deducting or collecting tax at source. It is used to ensure compliance with tax regulations under the Income Tax Act. However, if a business ceases to be liable to deduct or collect tax at source, it is necessary to surrender the TAN to avoid unnecessary complications or penalties.

TAN surrender is an official process through which the taxpayer informs the Income Tax Department that they no longer require the TAN due to the cessation of their business operations or due to any other valid reason. This helps in ensuring that the tax records remain accurate and updated.

Reasons for TAN Surrender:

Business Closure: When the business ceases its operations and is no longer required to deduct tax at source, TAN must be surrendered.
No Tax Deduction/Collection Obligations: If the business no longer has any tax deduction or collection responsibilities, it becomes mandatory to surrender the TAN.
Change in Business Structure: If a business undergoes restructuring, merging, or acquisition, and the TAN is no longer required, surrendering the TAN is necessary.
Non-Use of TAN: In case the TAN was obtained but not used, surrendering it can help avoid any further complications with the tax department.

Process to Surrender TAN:

Log in to the TAN Portal: Visit the official Income Tax Department’s TAN website and log in using the registered credentials.
Fill Out the Application Form: You need to fill out a surrender application form (Form 1) that includes details of the TAN, business information, and the reason for surrendering the TAN.
Submit the Application: Submit the filled application form along with any required documents and supporting information to the Income Tax Department. In some cases, you may be required to submit the original TAN certificate.
Receive Acknowledgment: After submission, you will receive an acknowledgment from the Income Tax Department confirming that your TAN surrender request has been processed.
Verification by Tax Department: The tax authorities will verify the surrender application. If everything is in order, the TAN will be officially surrendered, and a confirmation will be sent.

Important Considerations:

Filing Pending Returns: Ensure that all pending TDS/TCS returns have been filed before surrendering the TAN. If any returns are pending, the surrender may be delayed or rejected.
No Outstanding Liabilities: Before surrendering the TAN, make sure that there are no outstanding tax liabilities, penalties, or dues associated with the TAN.
Impact on Tax Filing: Once the TAN is surrendered, the business will no longer be able to file TDS/TCS returns using that TAN. If the business becomes liable to deduct or collect tax again in the future, a new TAN will need to be obtained.

In conclusion, surrendering the TAN is an important step for businesses that no longer have any tax deduction or collection obligations. It ensures that your tax records remain accurate and updated. Always ensure compliance by following the necessary steps and providing the correct documentation to avoid any penalties or complications.

How Afinthrive Advisory Can Help?

Afinthrive Advisory can assist in the TAN surrender process by ensuring that all necessary steps are followed accurately. We help businesses with the timely submission of forms, clearing any pending returns, and ensuring that the surrender process goes smoothly without any issues.

Affordable Pricing for everybody.

You won’t get the services at this unbeatable price range anywhere in India.

Essential

₹1500

(20%)

₹

1200

Plan inclusive of all charges

KEY FEATURES

Basic TAN Surrender
Document preparation and online application submission
Assistance with TAN cancellation process

Enhanced

₹3000

(17%)

₹

2500

Plan inclusive of all charges

KEY FEATURES

TAN Surrender with additional support for tax-related queries
Complete documentation and filing of surrender application
Assistance in closing of TAN records with the department

Ultimate

₹5000

(20%)

₹

4000

Plan inclusive of all charges

KEY FEATURES

Full TAN Surrender with customized support for all legal aspects
Preparation and submission of application along with legal documentation
Representation for any follow-up queries from the tax department
Post-surrender compliance assistance

TAN Surrender: Key Considerations

A concise guide to surrendering your TAN and fulfilling all procedural requirements

Required if you close your business, cease TDS/TCS operations, or undergo merger/demerger

When to Surrender TAN

Complete Form 49B with accurate details of TAN, PAN, and reasons for surrender

Form to Use

Submit the form online via the NSDL portal or physically at a TIN-FC with required documents

Submission Process

Sign digitally or physically as specified; mismatches can delay the surrender process

Verification Requirements

Obtain the e-acknowledgement or stamped form copy and retain it for future reference

Acknowledgement & Record-Keeping

When & Why to Surrender Your TAN

Cessation of Tax Deducting Activity: If you no longer need to deduct or collect tax at source—e.g., business closure or change in transaction nature—you should surrender your TAN.
Change in Business Structure: When your firm is merged, demerged, converted into another entity or taken over, the old TAN must be surrendered and a new one applied if required.
No Longer a Deductor or Collector: Entities exempt from TDS/TCS requirements (like certain trusts or non-profit bodies) must surrender TAN to avoid future compliance notices.
Prevent Misuse of TAN: An unused or orphaned TAN can be misused for fraudulent returns or false TDS credits; surrendering it closes that risk.
Avoid Penalties: Retaining an inactive TAN may invite demands or penalties for non-filing of TDS statements—surrender it promptly to stay compliant.

How to Surrender Your TAN: Step-by-Step Guide

Obtain Form 49B: Download or request the TAN Surrender form (Form 49B) from the NSDL-TIN facilitation portal or TIN-FC.
Fill in the Details: Enter your existing TAN, name, address, reason for surrender, and date of cessation of deducting/collecting activity.
Attach Supporting Documents: Include proof of business closure or change (e.g., incorporation certificate of new entity) and an authorization letter if submitted by a representative.
Submit to NSDL-TIN Centre: Send the completed Form 49B and attachments to the nearest NSDL-TIN Facilitation Centre by post or in person.
Receive Acknowledgment: On verification, NSDL issues an acknowledgment slip with a unique SRN—keep it safe as proof of surrender request.
Confirmation from Income Tax Department: Within 15–20 working days, you’ll receive an official confirmation letter/email stating that your TAN has been surrendered.
Update Your Records: Remove the surrendered TAN from letterheads, invoices, payroll software, and any other systems to prevent future use.

Essential Insights for Properly Surrendering Your TAN

TAN Surrender: Closing Your Tax Deduction Account

What Is TAN Surrender?

TAN surrender is the formal process of canceling your Tax Deduction and Collection Account Number when you no longer have deductable transactions, ensuring the TAN database remains accurate and up to date.

When Should You Surrender Your TAN?

Surrender becomes necessary if you cease operations that require TDS/TCS reporting—such as closing your business, merging into another entity, or shifting to a consultancy model without withholding obligations.

Key Documents Required

Prepare your original TAN allotment letter, a request letter on company letterhead stating reasons for surrender, and a copy of the business closure or merger certificate (if applicable).

Step-by-Step Surrender Process

1. Download Form 49B from the NSDL site. 2. Fill in your existing TAN details and reason for surrender. 3. Attach necessary enclosures. 4. Submit by post or in person at the TIN-FC (Tax Information Network – Facilitation Centre).

Typical Timeline and Acknowledgment

Once submitted, NSDL/TDIN issues an acknowledgment within 7–10 working days. Your TAN will be marked ‘ surrendered’ in the official records, and no further TDS challans can be filed against it.

Impact on Compliance

After surrender, you’re relieved of TDS/TCS filing obligations under that TAN. However, retain all past records for at least six years to comply with audit or assessment inquiries.

Common Pitfalls to Avoid

Avoid incomplete forms, missing signatures, or incorrect reason codes—these lead to processing delays. Also, don’t forget to inform your bank if you’ve linked TAN for TDS challan submissions.

Re-applying for TAN Later

If you restart deductible activities, you must apply for a new TAN via Form 49B. Note that the new TAN may differ from the old one, so update it promptly in all statutory systems.

Documents Required

Here is the check list of documents required.

Filled Form 49B
Original TAN allotment letter
Copy of PAN card
Proof of identity of authorized signatory
Proof of address of deductor
Letter requesting TAN surrender
Board resolution (for companies)
Digital Signature Certificate (DSC)
Acknowledgment of TDS/TCS returns filed

FAQs

Get Answers to your most asked questions.

What is TAN Surrender?

TAN (Tax Deduction and Collection Account Number) surrender is the process of surrendering your allotted TAN to the Income Tax Department when you cease to deduct or collect tax at source.

Who should surrender their TAN?

Any tax deductor or collector who no longer has the obligation to deduct or collect tax—due to closure, migration of business, or change of activity—must apply for TAN surrender.

When should TAN be surrendered?

You should surrender your TAN within 15 days of the date on which you ceased to deduct or collect tax at source.

Can TAN be surrendered online?

Yes. TAN surrender can be done online through the NSDL-TIN portal by selecting ‘Request for TAN’ → ‘Surrender of TAN’ and following the guided steps.

What documents are required for TAN Surrender?

You generally need: 1) a copy of the original TAN allotment letter, 2) a declaration stating the reason for surrender, 3) proof of GSTIN (if applicable), and 4) PAN of the deductor or collector.

Is there any fee for surrendering TAN?

No, there is no fee charged by NSDL or the Income Tax Department for the surrender of a TAN.

What is the online surrender procedure?

Log into the NSDL-TIN portal, choose ‘Surrender of TAN’, enter your TAN, fill in the reason, upload supporting documents, verify your details, and submit. You’ll receive an acknowledgement number.

What is the timeline for processing?

NSDL typically processes TAN surrender requests within 3–5 business days. The Income Tax Department updates the status thereafter.

How can I track my surrender application?

Use the acknowledgement number on the NSDL-TIN portal under ‘Track Application Status’ to view the current status of your TAN surrender.

What happens after successful surrender?

Once surrendered, the TAN is marked as ‘Inoperative’ in the TIN database, and you cannot use it for any TDS/TCS returns or certificates.

Can I reactivate or apply for a new TAN later?

No, once surrendered a TAN cannot be reactivated. If you need a TAN again, you must apply for a fresh allotment through NSDL-TIN.

What if I fail to surrender TAN on time?

Failure to surrender within the prescribed period may lead to notices from the Income Tax Department and penalties under the Income Tax Act for non-compliance.

Whom can I contact for help with TAN Surrender?

You can call the NSDL-TIN helpdesk at the number provided on their portal or email their support. Alternatively, consult a tax professional or your jurisdictional Assessing Officer.