TAN: Tax Deduction and Collection Account Number
PAN stands for Permanent Account Number, and TAN stands for Tax Deduction and Collection Account Number. PAN is a unique 10-digit alphanumeric number that is allotted to individuals, companies, and other entities by the Income Tax Department of India. In contrast, TAN is a 10-digit alphanumeric number allotted to persons who are required to deduct or collect tax on behalf of the government.
What is the meaning of TAN?
TAN stands for Tax Deduction and Collection Account Number. It is a 10-digit alphanumeric number allotted by the Income Tax Department of India to persons who are required to deduct or collect tax on behalf of the government.
TAN is mandatory for persons responsible for deducting tax at source (TDS) on salaries, interest, dividends, and other payments as specified by the Income Tax Department. TAN is also required for persons responsible for collecting tax at source (TCS) on certain transactions as specified by the government.
TAN is a unique identifier that helps track and monitor tax deductions and collections made by the person. It is used for filing TDS/TCS returns, issuing TDS/TCS certificates, and making payments towards TDS/TCS liabilities.
TAN can be obtained by applying Form 49B to any of the authorized TIN (Tax Information Network) facilitation centers or NSDL (National Securities Depository Limited) e-Gov TIN-FCs. Once the application is processed, TAN is allotted and communicated to the applicant by the Income Tax Department.
Who are eligible to apply for the TAN?
As per the Indian Income Tax laws, any person who is responsible for deducting tax at source (TDS) or collecting tax at source (TCS) is required to apply for a Tax Deduction and Collection Account Number (TAN).
The following are some of the entities that are required to apply for TAN:
- Individuals or firms who are carrying out business and liable to deduct TDS under the provisions of the Income Tax Act.
- Companies or corporate entities, including public and private limited companies, who are required to deduct TDS or collect TCS.
- Partnerships, limited liability partnerships (LLPs), and trusts that are required to deduct TDS or collect TCS.
- Government organizations or departments are required to deduct TDS or collect TCS.
How to apply for TAN?
When it comes to the TAN application, the user normally gets confused about many things, such as What is the procedure? What documents are required? Can a TAN application form be filled out online? What are the charges? Etc. Let us answer these queries of yours.
There are two modes for applying for TAN: online and offline.
You can apply for a Tax Deduction and Collection Account Number (TAN) in India by following these steps:
- Visit the NSDL website or TIN-FC website and download Form 49B.
- Fill in the form with accurate details and attach the necessary documents, such as proof of identity and address.
- Pay the required processing fee, currently Rs. 55 + [email protected]%.
- Submit the form and the supporting documents to any of the authorized TIN facilitation centers or NSDL e-Governance TIN-FCs.
- Once the form and documents are verified, TAN will be allotted and communicated to the applicant.
Currently, the fee for filing the TAN application is Rs.55/- + GST as applicable (the application fees may change from time to time).
For offline applications, one should file Form 49B in duplicate and submit it to any TIN Facilitation Centres (TIN-FC). Addresses of TIN-FCs are available at the NSDL-TIN website (https://www.tin-nsdl.com).
What is the importance of the TAN number?
The TAN number is important for the following reasons:
- Legal Compliance: As per the provisions of the Income Tax Act, 1961, it is mandatory for anyone responsible for deducting or collecting tax at source to obtain a TAN number. Failure to obtain a TAN number or quoting an incorrect TAN number can result in penalties and legal consequences.
- Tax Deduction and Collection: The TAN number is used to identify the person or entity who has deducted or collected tax at the source and credited the amount to the government's account. The TAN number is also used to issue TDS certificates to the person from whom tax has been deducted.
- Payment of Taxes: A TAN number is necessary to pay taxes online. It is also required for the e-filing of TDS returns.
- Avoidance of Fraud: A TAN number helps reduce fraud related to TDS deductions and collections. It ensures that tax is being deducted and collected only by authorized persons or entities.
Structure of TAN
The TAN (Tax Deduction and Collection Account Number) is a 10-character alphanumeric code issued by the Income Tax Department of India. The structure of TAN is as follows:
- The first four characters of the TAN are alphabets.
- The fifth character of the TAN is an alphabet, which represents the first letter of the surname or the last name of the person or entity who has obtained the TAN.
- The next four characters of the TAN are numeric digits.
- The last character of the TAN is the alphabet.
How to register TAN?
TAN registration is required by a deductor or collector of taxes, a taxpayer, and a PAO to view the status of challans, submit online TDS returns, download important forms like Form 16/16A/16B to make requests, and avail the other TDS administrative services online. The registration procedure for each category, i.e., deductor, taxpayer, and PAO, has been described in detail here.
Frequently Asked Questions
Q- Who allots TAN?
The Income-tax department allots TAN to all the persons who are required to deduct tax at source(TDS) or who are required to collect tax at source(TCS).
Q- Can PAN be quoted in place of TAN?
A PAN can never be quoted in place of a TAN under any circumstances, as both serve different purposes. However, a person required to deduct TDS as per section 194IA or section 194IB or section 194M, can use PAN in place of TAN.
Q- What are the modes which are available for payment of fees?
The following modes can process the payment fees:
- Demand draft
- Credit card/Debit card
- Net banking
- Cash ( if the offline form is submitted at TIN FC )
Q- Does the person need to pay to avail of a TAN?
Currently the fee for filing the TAN application is Rs.55/- + GST as applicable (the application fees may change from time to time).
Q- How to find the TAN number of a company by its name?
Go to Know Your TAN facility on the income tax efiling website. In the TAN search column, select a name, and in the next column asking for the category of the deductor, select - company /firm /AOP /BOI /AJP /AOP (trust) and Branches and enter state, name of deductor- , mobile no., and click on “Continue” button.
Q- How to find out the TAN number by using the PAN number?
No, it is not possible to search TAN by using PAN.
Q- How is TAN different from PAN?
TAN is a unique identification number allotted to persons who are deducting or collecting tax at source. PAN is a unique number allotted to assessees like individuals, companies, etc., for financial transactions, income tax returns, etc.
Q- Is filling the TAN section on TDS/TCS/ AIR slips mandatory?
Yes, it is mandatory to mention the TAN number on these documents; otherwise, the request will not be accepted, and the documents would return.
Q- How can I get my TAN changed to a new format?
If your TAN is still in the old format, you can check for the new format online by entering old details or visiting the nearest TIN-FCs center.
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