Tax Deduction Account Number or Tax Collection Account Number is a 10-digit alphanumeric number issued by the Income-tax Department (we will refer to it as TAN). TAN is to be obtained by all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS).
First 4 digits of TAN are alphabets, the next 5 digits of TAN are numeric and last digit is an alphabet.
First 3 alphabets of TAN represent the jurisdiction code, 4th alphabet is the initial of the name of the TAN holder who can be a company, firm, individual, etc. For example, TAN allotted to Mr. Mahesh of Delhi may appear as under:
DEL M 12345 L
Jurisdiction Code Name of deductee
As discussed above, every person liable to deduct tax at source or collect tax at source is required to obtain TAN. However, a person required to deduct tax under section 194-IA can use PAN in place of TAN as such person is not required to obtain TAN.
Further, a person required to deduct tax under section 194-IB shall not be required to obtain tax deduction account number (TAN).
As per section 194-IB (as inserted by Finance Act, 2017), 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% while making payment of rent of any land or building or both to a resident person if amount of rent exceeds Rs. 50,000 for a month or part of a month.
As per section 203A of the Income-tax Act, 1961, every person who deducts or collects tax at source has to apply for the allotment of TAN. Section 203A also makes it mandatory to quote TAN in following documents:
(a) TDS statements i.e. return
(b) TCS statements i.e. return
(c) Statement of financial transactions or reportable accounts
(d) Challans for payment of TDS/TCS
(e) TDS/TCS certificates
(f) Other documents as may be prescribed
The provisions relating to obtaining of TAN will not apply to a person deducting tax under section 194-IA (i.e. from sale consideration of land/building) and to such person, as may be notified by the Central Government in this behalf.
Consequences of not quoting TAN
Section 272BB(1) provides for penalty for failure to obtain TAN and section 272BB(1A) provides for penalty for quoting incorrect TAN. Penalty imposable under section 272BB is Rs. 10,000.
There are two modes for applying for TAN: (1) Online mode and (ii) Offline mode. They are as follows:
OFFLINE—An application for allotment of TAN is to be filed in Form 49B in duplicate and submitted to any TIN-FC. Addresses of TIN-FCs are available at NSDL-TIN website (https://www.tin-nsdl.com).
In case of an applicant, being a company which has not been registered under the Companies Act, 2013, the application for allotment of Tax Deduction Account Number may be made in Form No. INC-32 (SPICe) specified under sub-section (1) of section 7 of the said Act for incorporation of the company.
ONLINE—Online application for TAN can be made from the website of NSDL-TIN website.
Places from where to obtain Form 49B
(1) Form 49B is freely downloadable from the website of Income-tax Department (http://www.incometaxindia.gov.in)
(2) It is also available at TIN-FCs.
(3) Legible photocopies of Form 49B or forms legibly printed exactly as per the format prescribed by Income-tax Department are also allowed to be used.
Authority empowered to allot TAN
TAN is allotted by the Income-tax Department on the basis of the application submitted online at NSDL-TIN website or offline to TIN-FC managed by NSDL. NSDL will intimate TAN to the applicant at the address specified in the application.
No documents are required to be submitted along with application for allotment of TAN. However, for online application, the signed acknowledgment which is generated after filling up the form is to be forwarded to NSDL.
Procedure for online TAN application
The deductor can apply for TAN online at NSDL-TIN website (https://tin.tin.nsdl.com/tan/index.html)
No separate TAN is required to obtain for the purpose of TCS
TAN allotted for TDS can be used for the purpose of TCS also. In other words, no separate TAN is required to obtain for the purpose of TCS, if the person already holds TAN for the purpose of TDS.
How to find the address of nearest TIN-FC?
Addresses of all TIN-FC are available on NSDL-TIN website (https://www.tinnsdl. com). Single TAN is to be used in case of deductor who has to deduct tax from different types of payment such as salary, interest payment, etc.
TAN once allotted can be used for all types of deduction and collection. In other words, it is not necessary to apply for different TAN if the deductor has to deduct tax from different types of payment such as salary, interest payment, etc.
Enquire about the status of TAN application
After making the application for allotment of TAN, the deductor can enquire about the status of his application by accessing NSDL-TIN website at status track option and by quoting the unique 14-digit acknowledgement number after three days of his application.
This facility can be accessed from the website of Income-tax Department too (www.incometaxindia.gov.in). Government deductors are also liable to obtain TAN
Like Non-Government deductors, the Government deductors are also required to apply for TAN.