Tax deduction account number or TAN – All You Need To Know

Tax deduction and collection account number (TAN) is a 10 digit alphanumeric number issued by the IT department to the person responsible for deducting or collecting tax at source.

First 4 digits of the TAN is alphabets out of which initial 3 alphabets represent the jurisdiction code and the last one is the initial of the name of TAN holder. Next 5 digits are numeric and the last digit is an alphabet used as a check digit.

You can’t use your permanent account number in place of TAN. If tax deduction and collection account number is a must for you, then you have to get it.

You can hold both PAN and TAN based on your requirements. For instance, a company who is liable to deduct tax from employee’s salary is required to have it’s own Tax Deduction Account Number for deducting TDS. The same company is also required to have PAN as its liable to tax and has to file its own return of income every year in addition to other income tax compliance as applicable. In this case employee is required to have only PAN as tax deducted from his salary has to be deposited to his account by employer

Once a TAN is issued its valid for your lifetime.

How to apply for a TAN

There are two modes by which a person can apply for TAN, online and offline.

In online mode, the applicant is required to apply in form number 49B online through NSDL TIN website. After applying, you are required to send the signed acknowledgement copy to NSDL office at Pune along with the demand draft towards the processing fee of the application.

In offline mode, the applicant is required to submit form 49B at any one of the TIN FC along with cash.

The fee for processing the application is Rs. 65 (Rs. 55 as application charges plus 18% towards GST).

Companies are not required to apply for TAN as it should have been allotted to them at the time of company registration. You can look for it in company’s incorporation certificate issued by ministry of corporate affairs.

When should you apply

Every person deducting tax at source under section 192 to 196D or tax collected at source are compulsorily required to have a TAN. However, its not be required in case TDS has to be deducted under section 194IA.

TAN can be applied anytime. However, if tax has been deducted or collected at source, application form 49B has to be submitted within one month from the end of the month in which tax was deducted or collected.

If you have failed to apply it, then penalty under section 272BB of Rs. 10,000 can be levied by the Assessing Officer.

Where to quote TAN

TAN has to be compulsorily quoted in following documents;

  • TDS or TCS challan payments.
  • Certificate of deduction or collection of tax.
  • Quarterly TDS and  TCS return.
  • Annual information return
  • All other financial transactions or communicate with IT department and other documents as may be prescribed.

You can know your employer’s or deductor’s TAN from Form 16 or 16A issued to you or else you can check form 26AS online.

In case you have forgotten your own Tax Deduction and collection Account Number then you can know it by using this link of IT department.

If a person quotes wrong TAN in above documents or in any other documents, then he will be liable to pay a penalty of Rs. 10,000.

It is illegal to possess more than one tax deduction and collection account number. In case of having more than one tax deduction and collection account number, you should surrender which is not in use for cancellation. You can use “form for change or correction” to surrender. However, if you have taken TAN based on your different branches and divisions then you can continue holding it.

is a fellow member of the Institute of Chartered Accountants of India. He lives in Bhubaneswar, India. He writes about personal finance, income tax, goods and services tax (GST), company law and other topics on finance. Follow him on facebook or instagram or twitter.