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TAN (Tax Deduction Account Number)

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What is TAN?

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.

Why is TAN Required?

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

Documents for TAN

Individual Applicant

  • POI/ POA- Aadhaar, Passport, Voter ID, Driving Licence

Hindu Undivided Family

  • An affidavit of the HUF issued by the head of HUF along with POI/POA details

Company registered in India

  • Certificate of Registration issued by Registrar of Companies

Firms/ Partnership (LLP)

  • Certificate of Registration issued by the Registrar of Firms/ Limited Liability Partnerships and Partnership Deed.

Trust

  • Copy of Trust Deed or a copy of the Certificate of Registration Number issued by a Charity Commissioner.

Society

  • Certificate of Registration Number from Registrar of Co-operative Society or Charity Commissioner

Foreigners

  • Passport
  • PIO/ OCI card issued by the Indian Government
  • Bank statement of the residential country
  • Copy of NRE bank statement in India

Process Involved

  • STEP-1

Documentation

  • STEP-2

Preparation of documents

  • STEP-3

Filing of TAN application

  • STEP-4

Submission to Income Tax Department

  • STEP-5

Payment of Tan Fees

  • STEP-6

Tan Acknowledgement

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FAQs

TAN (Tax Deduction and Collection Account Number) is a ten-digit alphanumeric number issued by the Income Tax (IT) department to all persons responsible for collecting or deducting tax. It is use to make the payment of deducted or collected TDS/TCS to Income tax department. Under Section 203A of the Income Tax Act, 1961, it is compulsory to quote TAN on all TDS or TCS returns.

PAN or Permanent Account Number is allotted to taxpayers while TAN is a number allocated to tax-diductor’s or collectors, PAN and TAN both are a 10-digit identity number mandated by the Income Tax Department for any individual who carries out financial transactions or pays the Income Tax.

No, TAN can’t obtain without PAN. TAN is to be obtained by the person responsible to deduct tax. In all the documents relating to TDS and all the correspondence with the Income-tax Department relating to TDS one has to quote his TAN. PAN cannot be used for TAN, hence, the deductor has to obtain TAN, even if he holds PAN.

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