The full form of TAN is Tax Deduction and Collection Account Number. It is a 10-digit alphanumeric number issued by the Income Tax Department and is used as a unique identifier of a tax deductor/collector. All persons who are liable for deducting tax at source (TDS) or who are required to collect tax at source (TCS) are required to obtain TAN.
As per section 203A of the Income Tax Act 1961, it is mandatory to quote TAN in all communications with the Income Tax Department regarding TDS. Section 203A has also provisioned for a penalty of Rs. 10,000 in case the assessee fails to obtain the TAN number or quotes incorrect TAN number while filing TDS return. Therefore, every assessee who is liable to deduct TDS/collect TCS and deposit it with the government must obtain a TAN number.
Structure of TAN
Each digit of Tax Deduction and Collection Account Number represents different aspects. TAN is an alphanumeric number in which first four digits are alphabets, the next five digits are numeric and an alphabet at the last.
First three alphabets of Tax Deduction/Collection Account Number represent the code of jurisdiction; fourth alphabet represents the TAN holders name with the initial letter of name. TAN holder can be individual, firm, company, etc. The last alphabet is a random one. For an instance, TAN number allotted to Mr. Atul of Bangalore may look like BLR A 23456 M.
Who should Apply for TAN
- Every person liable to deduct tax at source/collect tax at source is required to obtain TAN
- A person required to deduct tax under section 194-IA can, however, use PAN in place of TAN as such person is not required to obtain TAN.
- A person required to deduct tax under section 194-IB/194M is not required to obtain tax deduction account number (TAN)
- According to 194-IB any individual or HUF [whose books of account are not required to
be audited under section 44AB] is liable to deduct tax at the rate of 5% when making payment of rent of any land or building or both to a resident person in case the amount of rent is more than Rs. 50,000 for a month or part of a month.
- As per section 194M, deduction of tax at the rate of 5%, from the sum paid/credited to a resident, in a year on account of contractual work, commission (not being insurance commission as referred to in Section 194D), brokerage/professional fees, by an individual or a HUF [whose books of account are not required to be audited under Section 44AB], in case the aggregate of such sum is more than Rs. 50 lakh in a year.
What is the Relevance of TAN
According to Section 203A of the Income-tax Act, 1961, every person who deducts/collects
tax at source has to apply for the allotment of TAN. Section 203A also makes it
mandatory to quote TAN in following documents:
- TDS statements i.e. return
- 2.TCS statements i.e. return
- Statement of financial transactions/reportable accounts
- Challans for payment of TDS/TCS
- TDS/TCS certificates
- Other documents as may be prescribed
Documents Required for TAN Application
In case you are applying through offline mode, you don’t need to submit any document. However, if the application is placed via an online route, you need to duly sign the acknowledgement generated on successful submission and payment of processing fee towards TAN application. Signed acknowledgement needs to be sent to NSDL (Protean)
Read more: Documents Required to Apply New PAN Card
How to Apply for TAN
You can apply for TAN offline as well as online.
Online TAN Application Process
The following are the key steps you can follow to obtain your TAN number online:
- Log on to the Tax Information Network website of NSDL
- Click on “Services” option and then click on “TAN”
- Now, click on “Apply Online” option in the left-hand bar and then select “New TAN” from the drop-down menu
- You will be asked to fill in Form 49B. Enter the required details and click on “Submit” option.
- After submitting the details, you will be directed to the payment page. An amount of Rs. 65 (inclusive of GST) needs to be paid for the TAN application. You can pay it online using your debit/credit card or net banking. Else, you can choose to pay it using a demand draft or challan. The central government, state government, statutory or autonomous bodies can make payments only by cheque or demand draft.
- After selecting the payment option, you will see an acknowledgement screen that displays the following information:
- 14-digit acknowledgement number
- Status of the application
- Name of the applicant
- Contact details (address, email and phone number)
- Payment Details
- Column for Signature
If you have paid the application fee online, you have successfully submitted the TAN application. In case, you have selected offline mode of payment (DD/Challan), then the duly signed acknowledgement receipt along with the DD/Challan should be sent to the NSDL office at:
NSDL e-Governance Infrastructure Limited,
5th floor, Mantri Sterling,
Plot No. 341, Survey No. 997/8,
Model Colony, Near Deep Bungalow Chowk,
Pune – 411016
Offline TAN Application Process
- You can apply for TAN offline by filling in Form 49B in duplicate and submitting the same at any TIN-FC (Facilitation Centre). Addresses of TIN FCs are available at Protean (formerly NSDL eGov) TIN website
- Applicants can get the application forms from TIN-FCs, any other vendors providing such forms or can download the same from the NSDL (Protean) website.
- You can also download Form 49B online and fill in the required details as per the instruction sheet and send it to the NSDL office along with the DD/Challan in order to apply for a new TAN online.
- Form No. INC-7 specified under sub-section (1) of section 7 has to be used by companies which have not registered themselves under the Companies Act, 2013 for the application of allotment of Tax deduction/collection account number.
On allotment of the TAN number, intimation will be sent by NSDL to the applicant.
Track TAN Status
Applicants can track the status of their TAN application after three days of application using their 14-digit unique Acknowledgment Number via the track status facility available on the NSDL (Protean) website. Here is a step-by-step process to do so:
- Visit the NSDL (Protean) website
- Under the Services section, click on “TAN”
- On the next page, click on “Know Status of Your Application”
- Select the application type as TAN
- Enter the acknowledgement number, the captcha code and click on “Submit” to know the status of TAN application.
Alternatively, you can also track the status of your TAN application by calling up the TIN Call Centre on 020 – 2721 8080 or by sending an SMS NSDLTAN to 57575.
TAN Registration Process
A registered deductor can access various services/features such as view challan status, Justification Report and Form 16 / 16A, download Conso File, view TDS / TCS credit for a PAN and even verify PAN of Tax Payers linked to the deductor/collector. To register TAN on the TRACES website, follow the steps given below:
Step 1: Visit www.tdscpc.gov.in and click on “Register as Tax Deductor” or go to https://www.tdscpc.gov.in/app/dedregs1.xhtml
Step 2: Fill the necessary details, your login credentials and click on “Create Account”
Step 3: You will see the confirmation screen from where you can validate the correctness of the input. In case you wish to make an amendment/change, you can choose the edit option.
Step 4: After you confirm the data, the account will be created and an activation link and codes will be sent to your email id and mobile number.
Online TAN Verification Process
‘’Know Your TAN” facility provided by the Income Tax Department can help you check the TAN details/TAN verification online using the company’s name or TAN. It’s important to do TAN registration online before you carry out your TAN verification. To know more about the TAN verification process, click here.
Benefits of TAN Registration and Verification
- From the database of updated active TAN details, the deductor can easily receive communication from the Income Tax Department regarding Tax collected at source (TCS) and Tax Deducted at Source (TDS)
- Every deductor will have authenticated login area
- Deductors will also have previsions or benefits to download the latest Input file (FVU) for the purpose of preparing correction statement and check the challan status online.
- The deductor can receive a statement showing the status of tax deducted at source (TDS)
- Reconciliation of tax deducted at source (TDS) to TAN holder with regards to Section 200A.
- Deductor can easily upload Tax deducted at source (TDS) returns online
Q. How can I get TAN user ID and password?
Ans. You can get your TAN user ID and password by registering yourself as a tax deductor/collector on the TRACES website.
Q. Within how many days should my TAN acknowledgement and DD/challan reach NSDL office in case I want to make my payment offline?
Ans. Your TAN acknowledgement and DD/challan should reach the NSDL office within 15 days of making the online application.
Q. Do I need to have a separate TAN for TDS and TCS?
Ans. TAN allotted for TDS can also be used for TCS and it is in fact illegal to possess more than one TAN.
Q. Are government deductors also liable to obtain TAN?
Ans. Yes, both non-Government and Government deductors are liable to obtain TAN.
Q. Is it possible to make changes or corrections in my TAN data?
Ans. Yes, it is possible to make changes/corrections to your TAN data by filling up the “Form for Change or Correction in TAN data for TAN Allotted” available on the NSDL (Protean) website.
Q. How will the applicant be intimated about the new TAN?
Ans. An allotment letter is dispatched by Protean e-Gov at the address provided in Form 49B.
Q. What is the validity of TAN?
Ans. TAN is a unique number with lifetime validity.
Q. Do salaried individuals and HUFs need to get TAN?
Ans. No, salaried individuals and Hindu Undivided Families (HUFs) are not required to obtain TAN.
Q. What are the TAN registration documents?
Ans. TAN registration can be carried out online via the TRACES website and does not require any documentation.
Q. Is there a fee for TAN registration?
Ans. Once you apply for TAN and pay the application fee of Rs. 65 (including GST), you are not required to pay any charges for TAN registration.