A Complete Guide on TAN: Significance, Structure, How to Register

What is TAN?

The full form of TAN is Tax Deduction or Collection Account Number. Every person liable to deduct TDS or TCS must apply for TAN.

As per section 203A, this 10-digit alphanumeric number must be quoted when you become liable to either Deduct or Collect tax (i.e., liable to deduct TDS or collect TCS), make payment through challan, or file TDS returns or issue a Tds certificate to the deductee.

What is the structure of the TAN?

TAN is a 10-digit alphanumeric number. The structure of TAN is as follows: ABC D 12345 X. So the first 4 characters are alphabets followed by 5 digits and then 1 alphabet at the end. The first 3 alphabets of TAN no. represent the city where TAN has been allotted, and 4th character of TAN no. represents the initial letter of a person's name. All 5 digits and the last alphabet are automated characters generated by the system.

What is the significance of obtaining a TAN number?

As per our country's tax laws, a person deducting TDS or TCS must deposit it into the treasury within a specified period, along with a return specifying the details as required by the government. Therefore, TAN is a unique identification number in all correspondence with the department. This also enables the government to credit the tax receipt and give credit to the deductee (the person whose TDS was deducted). This credit is reflected in the 26AS, i.e., the tax credit statement.

How to know your TAN Number online?

TAN does not come in the same physical form as a PAN. Consequently, only an allotment letter is allotted as proof of TAN. So, it is not always feasible for an individual to keep it in handy, and we also don’t have computer memory to remember such complicated digits.

Therefore, given your secure internet connection, you can find a TAN number anytime from anywhere. Follow these simple steps to check your TAN number online.

• Visit the Income Tax E-filing portal. On the left side, under Quick Links, click on the option “Know Your TAN .”
• After clicking, You will be redirected to the screen as shown below. Here enter the required details:
  1. TAN Search: Select either TAN/ Name
  2. Category of Deductor: Select the category from the drop-down menu.
  3. State: Select the state from the drop-down
  4. TAN/ Name: Enter the Name / TAN depending on the option you choose above. (If you search Name by selecting TAN-based, enter TAN; if you select Name-based search, enter the name.)
  5. Mobile No. - Enter the Mobile Number.
• After filling in the details, click the “Continue“ button.
• When you click the “Continue“ button above, an OTP will be sent to your mobile number. Enter that OTP in the box and click on the “Validate” button.
• Once you validate the OTP, TAN details will be shown in the same manner as in the screen below.
• Now you have a basic idea about TAN, but there are many other things in this context besides it.

What are the penalties for failure to apply for TAN or false quoting of TAN in TDS returns?

There are penalties in the income tax act for failure to apply for TAN if mandatorily required to apply or for mentioning incorrect TAN. The penalty of Rs. 10,000 is imposable mention.

What is duplicate TAN?

When a person already holds a valid TAN and obtains an additional one, it is a duplicate TAN. Having more than one TAN except for different branches or divisions of an organization is illegal.