TAN is an important number that is required by any entity that deducts tax at source or collects tax on behalf of the Income Tax Department. As per Section 203A of the Income Tax Act, it is mandatory to quote the TAN number in TDS/TCS returns, TDS/TCS challans as well as TDS/TCS certificates. The Income Tax Department will not receive TDS/TCS returns if the TAN number is not quoted. Banks will not issue TDS/TCS challans if TAN number is missing. Failure to quote TAN number in these documents will attract a penalty of Rs.10,000. All other information about TAN like what is TAN, how to apply online or offline are as given below:
What is TAN Number?
TAN is the Tax Deduction and Collection Account Number. It is a ten-digit alpha-numeric code that is mandatory for any entity responsible for deducting tax at source or collecting income tax on behalf of the IT department. The TAN number is allotted by the Income Tax Department, based on applications submitted to the Tax Information Network (TIN) or the TIN facilitation Centres. TAN numbers can be allotted to firms, companies, government departments or individuals. The TIN facilitation centres are managed by National Securities Depository Limited (NSDL). Once TAN number has been allotted, NSDL will intimate the TAN at the address mentioned for all future correspondence related to TDS/TCS.
How to Apply for TAN
Applying for TAN is a simple process and there is no documentation requirement. There are two ways in which you can apply for TAN:
Form 49B is the application form for TAN. This can be collected from the TIN facilitation centre closest to you or can be downloaded from the NSDL website or the Income Tax website.
The filled in application needs to be submitted at the TIN facilitation centre for receipt of e-TDS returns. No other document needs to be submitted. A processing fee of Rs. 50 needs to be paid. Incomplete forms will not be accepted by the TIN facilitation centres.
The online application process is even simpler than the offline process. You need to login to the NSDL website http://tin.nsdl.com and fill in the online application form. You will receive an acknowledgment for the online submission of application. This acknowledgment needs to be printed out and forwarded to NSDL in order to complete the application process.
Once you receive the TAN number, you can use it for all deductions such as salaries, interests and dividends. You can also use the same number for all returns, challans and certificates. However, branch offices of companies are permitted to have separate TAN.
TAN is a mandatory requirement for all entities that are responsible for tax deductions or collections on behalf of the Income Tax Department. TAN helps you to deduct TDS, deposit it to the central government and generate Form 16. The Income Tax Department uses TAN to capture the details of the TAN holder such as name, address and PIN code. It also helps you to file TDS/TCS returns, generate TDS/TCS challans and certificates.
Additional read: Difference between PAN and TAN
The process of obtaining TAN has been streamlined and the structure of TAN has been modified in order to facilitate the smooth filing of returns.