Tax Deduction and Collection Account Number (TAN)

1. Meaning of TAN

The Tax Deduction and Collection Account Number (TAN) is a 10-character alphanumeric code issued by the Income Tax Department of India under Section 203A of the Income Tax Act, 1961. It is mandatory for all persons responsible for deducting (TDS) or collecting tax (TCS) on payments made to others.

2. Structure of TAN

Example: BLRP01234A

  First 4 characters – Represent the city or area code.

  Next 5 characters – Represent the deductor’s name or organization.

  Last character – Check digit for verification.

3. Purpose of TAN

TAN is used for:

  Depositing Tax Deducted at Source (TDS) or Tax Collected at Source (TCS).

 Filing TDS/TCS returns and generating Form 16/16A for deductees.

  Ensuring proper tracking of tax deducted or collected on behalf of the government.

4. Who Needs to Obtain TAN

TAN must be obtained by:

  Employers deducting TDS on salaries.

  Companies, firms, or individuals making payments requiring TDS (like rent, commission, contract payments, etc.).

  Entities collecting tax at source (TCS).

  Government offices deducting or collecting tax.

5. Procedure for Obtaining TAN

1. Application Form: Use Form 49B for TAN application.

2. Mode of Application: Online through Protean eGov Technologies Ltd (formerly NSDL) website (https://www.protean-tinpan.com) or at TAN facilitation centres.

3. Processing Fee: A nominal fee is charged for TAN application.

4. Issuance: After verification, a TAN allotment letter is issued by the Income Tax Department.

6. Quoting TAN

TAN must be quoted in:

  TDS/TCS challans and returns.

  TDS/TCS certificates (Form 16, 16A, etc.).

  All correspondence with the Income Tax Department related to TDS/TCS.

7. Penalty for Non-Compliance

Under Section 272BB of the Income Tax Act, failure to apply for TAN, or quoting an incorrect TAN, attracts a penalty of ₹10,000.

8. Correction or Change in TAN Data

If there is any mistake in the TAN details (like name, address, or category), correction can be made by submitting a TAN correction form online through the same Protean portal.

9. Conclusion

TAN is a vital identification number for deductors and collectors of tax under the TDS/TCS system. It ensures proper credit of tax deducted at source to the government and helps in maintaining transparency and compliance in taxation.