Tax Deduction and Collection Account Number better known as TAN is a 10-digit alphanumeric number. The number is required to be obtained by all persons who are responsible for deducting or collecting the tax. The alphanumeric number is allotted by the Income Tax (IT) Department under Section 203A of the Income Tax Act, 1961. It is required to be mandatorily quoted on all TDS returns.
TAN is required by all individuals because without it Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) returns are not accepted by TIN facilitation centres. Banks do not accept the challans for TDS/TCS payments if TAN is not quoted.
It needs to be mentioned that failing to apply for TAN or not quoting the 10-digit alphanumeric number in specified documents like TDS/TCS returns, e-TDS/e-TCS returns, TDS/TCS certificates, and TDS/TCS payment challans can attract a penalty of Rs.10,000/-.
Who Needs to Apply for TAN?
All those who are required to deduct or collect tax at source on behalf of the Income Tax department need to apply and obtain the 10-digit alphanumeric TAN.
Types of TAN Applications.
There are basically two types of TAN applications. They are:
1. Application for issuance of new TAN.
2. Form for change or correction in TAN data for TAN allotted.
Preparation of documents
Filing of TAN application
Submission to Income Tax Department
Payment of tan Fees