TAN Number: A Comprehensive Guide for Taxpayers
TAN Number: A Comprehensive Guide for Taxpayers
In India, individuals or entities responsible for collecting tax at source (TCS) or deducting tax at source (TDS) receive a distinctive 10-digit alphanumeric identifier known as the TAN, which the Income Tax Department of the Central Government issues. The TAN number plays a pivotal role in tax compliance as mandated by Section 203A of the Income Tax Act of 1961. It is mandatory to include the TAN number on all TDS return or TCS returns submitted, making it a crucial component of India’s tax regulatory framework.
Get Your TAN Number Now!What is TAN Number – Meaning and Structure
The tax Deduction and Collection Account Number is a full form of TAN Number, which is a ten-digit alphanumeric code with a distinct structure:
- First Four Digits (Letters): The initial three letters in the TAN represent the jurisdiction where the TAN is issued. In contrast, the fourth letter is the first letter of the entity or individual applying for the TAN.
- Next Five Digits (Numerical): The five numerical digits in the middle are unique numbers the system generates.
- Last Digit (Letter): The final digit is a unique letter the system generates.
This structured sequence of letters and numbers helps identify the TAN’s origin and source, making it a unique identifier for tax-related purposes.
Who Needs to Get TAN?
As mentioned above, If you’re responsible for deducting taxes when making certain payments, you must obtain a TAN (Tax Deduction and Collection Account Number).
Why Obtaining a TAN Number is Essential
Following Section 203A of the Income-tax Act, 1961, it is imperative for any person responsible for deducting or collecting tax at source to seek the allocation of a TAN (Tax Deduction and Collection Account Number). Furthermore, Section 203A mandates the inclusion of TAN Number in various documents.
TAN must be mentioned in the following documents:
- TCS or TDS statements/returns.
- Challans for TDS or TCS payments.
- Submission of TCS or TDS certificates.
- Collection or submission of various IT-related forms and documents.
Penalty for TAN Non-Compliance
If you fail to apply for a TAN or forget to include it in the required documents, you may face a penalty of Rs. 10,000, as outlined in Section 272BB.
TAN Application Process
The process of applying for a TAN (Tax Deduction and Collection Account Number) offers two options:
Offline Method
For the offline method, the applicant should complete Form 49B (the application form for TAN allotment) and submit it, along with the necessary fees, at any TIN-Facilitation Center (TIN-FC) of Protean.
Alternatively, the applicant can download the TAN application from the NSDL website, fill it out, and then submit the completed form and the required fees to the TIN-FC. The Form 49B is attached here for reference:
In cases where the application is made in person at a TIN-FC, there is no need to provide supporting documents to the Income Tax (IT) department.
Online Method
Applicants can choose to apply for TAN online via the NSDL website. They should carefully follow the instructions, fill out the online form, and submit it electronically.
- Upon successful submission, they will receive an acknowledgment number. Printing this acknowledgment number and sending it to the NSDL office in Pune is essential.
- The application fees can be paid online or through a demand draft or cheque.
- Once the IT department receives the TAN application, they will review the provided details and issue the TAN for the applicants to NSDL.
- The NSDL will then send the TAN details to the address provided in Form 49B or communicate it via email.
TAN Application Fees
The cost of applying for a TAN (Tax Deduction and Collection Account Number) is a processing fee of Rs. 65, including Goods and Service Tax (GST).
TAN Number Search
Taxpayers can access a tax collector or deductor’s TAN (Tax Deduction and Collection Account Number) through the e-filing portal. Here’s how to do it:
Visit the e-filing portal’s homepage and find the ‘Quick Links’ section.
- Click on the ‘Know PAN Details’ option within this section.
- Select the category of the deductor and provide the deductor’s name, state, and your taxpayer’s mobile number.
- Click on the ‘Continue’ button to proceed.
- You must then validate your identity with an OTP (One-Time Password).
- After successful validation, a list of records matching the deductor’s name will be displayed.
By clicking on the deductor’s name from the list, you can access the deductor’s basic and AO (Assessing Officer) details.
This search feature lets taxpayers easily retrieve essential tax deductions and collection information.
Changing Your TAN Data Online
If you need to change TAN Data (Tax Deduction and Collection Account Number) data, you can do so online by following these steps:
- Step I: Visit the website: https://tin.tin.nsdl.com/tan/index.html. Select “Online Application for Changes or Correction in TAN Data for TAN allotted” (TAN Change Request Form).
- Step II: Fill out the TAN Change Request form online. Submit the form.
- Make sure to complete all mandatory fields (marked with *) in the form.
- Select the corresponding box on the left margin of the appropriate field where a correction is needed.
- Step III: If there are any format-level validation errors in the data you submitted, you will receive a response indicating the error(s) on the screen.
- Step IV: Correct the error(s) in the form. Resubmit the form.
- Step V: If there are no form-level errors, a confirmation screen will display the data filled in by you.
- Step VI: If you need to amend the data shown on the confirmation screen, you can choose the edit option.
- Step VII: Select the confirm option if the displayed information is correct.
- Step VIII: After successfully paying the fees, an acknowledgment slip will be generated (if payment is not by DD or Cheque).
- Step IX: Save and print the acknowledgment slip. Send it, along with the required documents, to Protean (formerly NSDL eGov) at the following address:
- Protean eGov Technologies Limited,
- 4th floor, Sapphire Chambers,
- Baner Road, Baner,
- Pune – 411015
Note:
You can request a TAN change only for the “change of category of the applicant” if the category is incorrectly mentioned in the Income Tax Department (ITD) TAN database. For example, if ABC Ltd. is categorized as a “Firm” in the ITD TAN database, the category can be corrected to “Company,” which is the accurate category.
If you’re requesting the cancellation of a TAN, the TAN to be canceled should be different from the TAN currently mentioned at the top of the form.
Exceptions to TAN Number Requirement:
However, there are specific situations where you can use your PAN (Permanent Account Number) instead of applying for a TAN:
- Section 194IA: If you’re involved in selling specific properties, except agricultural land, you need to deduct tax at source.
- Section 194-IB: If paying rent exceeding Rs. 50,000 per month, you should deduct 5% tax at source. This rule applies to individuals and HUFs (Hindu Undivided Families) who are not required to undergo a tax audit under Section 44AB in the previous financial year.
- Section 194M: If you’re making payments for contractual work, commission (excluding insurance commission), brokerage, or professional fees, the total surpasses Rs. 50 lakhs in a financial year, you must deduct 5% tax at source. This provision also applies to individuals and HUFs not covered under Section 194C, Section 194H, and Section 194J.
Using your PAN instead of obtaining a separate TAN is allowed in these specific cases.
Difference Between TAN and PAN
Here is a comparison between TAN (Tax Deduction and Collection Account Number) and PAN (Permanent Account Number) in table format:
| Aspect | TAN (Tax Deduction and Collection Account Number) | PAN (Permanent Account Number) |
| Issuer | Income Tax Department of India | Income Tax Department of India |
| Purpose | Facilitates tax deduction and collection | Comprehensive financial identifier |
| Applicability | Required for tax deduction and collection | Mandatory for all taxpayers |
| Governed by | Section 203A of the Income Tax Act | Section 139 of the Income Tax Act (1961) |
| Penalty for Non-compliance | Failure to furnish TAN may result in a penalty | Failure to furnish PAN may result in a penalty |
| Application Forms | Form 49B (Offline) or Online application through NSDL | Form 49A (Indian citizens) or Form 49AA (Foreigners) |
| Supporting Documents | Generally not required for offline application; signed acknowledgment for online application | Requires valid ID proof with a photograph, proof of age (DOB), and photographs (if individual) |
| Change Requests | It is Possible to request changes or corrections online | Changes can be requested through Form 49A (Indian citizens) or Form 49AA (Foreigners) |
| Online Services | Available for application and change requests | Limited online services available for PAN |
| Structure | 10-digit alphanumeric code with a specific format | 10-character alphanumeric code with a unique structure |
| Main Use | Primarily used for tax deduction and collection | Utilized in various financial transactions and government-related activities |
Know more about Difference between TIN, TAN, VAT, PAN, DSC and DIN
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