What is TAN?

TAN (an acronym for Tax Deduction and Collection Account Number) is a unique 10-digit alphanumeric number assigned by the Income Tax Department to companies, firms, government departments or individuals, who are required to deduct or collect tax.

TAN number needs to be quoted while filing for TDS/TCS/Annual Information Returns, payment challans, and certificates by TAN holders. If not, then the returns filed are not accepted by the TIN facilitation centres or any banks across the country. If anyone, who deducts or collects tax, is found guilty of not having TAN, then he/she will face a penalty of INR 10,000.

Also, failure in quoting the correct TAN number will result in the same.

Structure of TAN

The TAN number has been prone to many changes over the years. The format which is currently used is explained below with an example.

Example, LKN A 12562 G

• The first three digits are letters which denote the jurisdiction code, Here LKN means the deductor’s/collector’s jurisdiction is Lucknow. Similarly, DEL signifies Delhi.
• The fourth digit is also a letter which symbolises the initial of the name of the TAN holder.
• The next five digits are numbers that are automatically generated by the system.
• And the last digit is a letter which is also system generated, different for everyone

Who needs TAN?

Individuals or entities who are responsible for deducting tax at source (TDS) or collecting tax at source (TCS) on behalf of the Tax Department are required to have TAN, except the following cases,

• Persons deducting tax under section 194-IA of the Income Tax Act can use PAN instead of TAN as such persons need not require TAN.
• The persons deducting tax under section 194-IB or section 194-M need not obtain TAN.

Eligibility for TAN

TAN is compulsory for those individual and entities who are running a business and paying salaries/commissions to their employees. The categories of applicants are as follows,

• Company/Branch/Division of a company
• Individual (Sole Proprietorship) / Branch of individual business
• Hindu Undivided Family (HUF)
• Firm / Branch of firm
• Association of Persons/Body of Individuals/ Association of Persons (Trusts)/Artificial Juridical Person

Documents for TAN Application

No other documents are required other than the application form itself to apply for TAN. If the application is done online, it is necessary to generate an acknowledgement with the applicant’s signature, which is to be sent to the NSDL. This acknowledgement is generated once the applicant fills the form.

Procedure to Obtain TAN

Application for TAN can be made via offline or online. It is to be noted that there are two types of TAN applications. For someone who is applying for the first time has to fill Form 49B (New TAN). The other form is for those who already possess TAN and intend to make rectifications in the information provided during the first-time application process.

Online Application

1. Visit the online portal of TIN (Tax Information Network), https://www.tin-nsdl.com/.
2. Click on Services tab and then click on TAN. Select Apply Online after that.
3. One has to fill Form 49 B, which will appear after selecting the category under which the applicant wants to apply for a TAN. Fill in the required details and click on Submit option.
4. Once done submitting, you will be directed to the payment page where you have to pay the processing fee. The fee is as of now INR 55 exclusive of 10.20% service tax, which makes the total payment as INR. Both online and offline payment options are available.
5. After selecting the payment option, an acknowledgement will be displayed having 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
6. If the application fee is paid online, then TAN application has been successfully submitted. In case, offline mode of payment (Demand Draft/Challan) was chosen, then the duly signed acknowledgement receipt along with the DD/Challan has to be sent to the NSDL office

Offline Application

Application for TAN offline can be made just by walking into the nearest TIN Facilitation Centres, along with the photocopies of the identity and address proofs of the deductor/collector.

If the applicant is a company which is not registered under the Companies Act, 2013, application for the allotment of TAN needs to be made in Form No. INC-32 (Open SPICe) as per section 7(1) of Companies Act for the incorporation of the Company.

How to Search TAN?

TAN details can be accessed by either providing the name or TAN. In case you have forgotten TAN, following the steps mentioned below to retrieve it,

• Visit www.incometaxindiaefiling.gov.in
• Click on Know Your TAN
• Select Name under the TAN Search option
• Select Category of Deductor
• Select State
• Provide Name
• Provide the registered mobile number
• Click on Continue
• Insert the One Time Password (OTP) sent on the registered mobile number in the corresponding screen
• Next, click on Validate
• The details are displayed on the corresponding screen.