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TAN: What is TAN, Structure, Who can Apply

What is TAN?

TAN is a short form used for Tax Collection Account Number / Tax Deduction Account Number. TAN is a 10-digit alphanumeric number issued by the Income-tax Department allotted to the entities that are liable to deduct TDS by the Income Tax Department. Any individual, firm, or company that is responsible for a tax deduction at source (TDS) or tax collection at source (TCS) uses the TAN number in the e-filing of the Income Tax Return.

Structure of TAN

TAN Format- JPRD00214F

The first Four digits are alphabetic, then after five digits are numeric, and the last digit is Alphabetic. Here, the first three alphabets show the jurisdiction code where the TAN was issued, and 4th alphabet represents the initial letter of the TAN holder's name. Any firm, company, individual, etc., can be a TAN holder if it/he is responsible for TDS or TCS. 

TAN is mandatory to be allotted to individuals, firms, or companies that collect or deduct tax at source. Individual entities apply for TAN allotment to get tax benefits under section 203A in the Income-tax Act, 1961. The Tax Deducted at Source (TDS) on payments made by assessees is deposited under the TAN to enable the assessees who have received the payments to claim the tax deducted in their income tax return.

 Who can apply for TAN?

All persons liable for deducting tax at source (TDS) or mandated to collect tax at source (TCS) are required to obtain TAN including:

  • Individuals

  • Hindu Undivided Family (HUF)

  • Company and Firms

  • Central or state government

  • Sole proprietor

  • Associations of persons

  • Trusts