In India, the Income Tax department of the Central Government issues a 10-digit alphanumeric number to all persons who bear the responsibility of collecting tax at source (TCS) or deducting tax at source (TDS). This number is unique and is known as the TAN. Under Section 203A of the IT Act of 1961, the TAN number has to be quoted on all TDS returns filed.
TAN number full form:- Tax Deduction and Collection Account Number.
This number is an essential part of the tax compliance mechanism under Indian laws.
The structure of this 10-digit unique identifier has undergone several revisions over the years. The current structure has 4 alphabets at the start, followed by 5 numerals and ends with an alphabet again.
The identifier has several details encoded using this combination of letters and numerals. These details are broken down as mentioned below –
The structure can be better understood with two examples, albeit fictional ones.
It is imperative that you know your TAN no. Without it, you are certain to face a series of difficulties while filing your tax returns.
Following are some reasons why holding a Tax Deduction and Collection Account Number is necessary. Note that all these provisions are clauses and conditions under Section 203A of the IT Act, 1961.
Here, it is crucial to note that there is an important exception when it comes to obtaining and quoting the TAN. The number is not mandatory for any individual who deducts tax under Section 194-1A of the IT Act of 1961.
This section applies to taxation/s for sales consideration of fixed assets like a plot of land or a building.
If an individual or a firm is yet to obtain a TAN number, Section 272BB(1) of the ITA, 1961, imposes a penalty. Also, if an incorrect TAN is quoted, Section 272BB(2) has the authority to impose a penalty. The maximum penalty that can be imposed under Section 272BB is Rs. 10,000.
There are two major types of TAN applications, and they are:
The processing fee for the applications is ₹65 including GST.
You can choose between either online or offline methods to apply for and obtain a TAN. Most applications nowadays are routed through an online channel. The application process has been made very efficient due to online single-window services.
A deductor applying for a TAN number can do so by logging on to the official NSDL-TIN website.
The process to be followed is mentioned here –
The total amount the applicant has to pay for online TAN allotment is Rs. 55 plus 18% GST.
Prior to GST implementation, individual states would levy their respective service charges. Now, this amount is the same across India.
The payment can be completed in multiple ways including –
The offline method still exists for those who are not well-versed with online procedures. Applicants must obtain a copy of Form 49B and complete all the details required before submitting it to their nearest TIN-FC centre.
One of the problems which a lot of applicants face is scant information on the availability of this Form. Please note that it can be procured in multiple ways –
Once you have deposited this Form with all details mentioned, you can know your TAN no. as soon as the request is processed. Note that you do not have to submit any documents when applying offline.
After applying, the applicant will have a 14-digit acknowledgement number.
Individuals who have misplaced their TAN number can easily check all the TAN details online following these simple steps:
The TAN details will be displayed on the next page.
While they are issued by the same authority- the TAN meaning in income tax Department of India– there are several points where these two differ. Here is a brief explanation on TAN vs PAN.
|Issued by||The IT Department||-do-|
|Identifying code||10-digit alphanumeric code||-do-|
|Primary purpose||Acts as an all-in-one code or permit for every financial transaction.||Helps make TDS processes easier.|
|Required by||Every taxpayer||All individuals and firms having to pay tax at source.|
|Governing laws||Section 139 of the IT ACT (1961)||Section 203A of the same Act|
|Penalties and fines associated||Rs. 10,000 if an individual/firm fails to furnish PAN||-do-|
|Necessary forms to be filled up||1. For Indian citizens-Form 49A
2. For foreigners- Form 49AA
|Form 49B is the sole document needed|
|Maximum number of units that can be held||One||One|
|Documents required for application||1. Valid and current ID proof with photograph
2. Proof of age (i.e. DOB)
3. Copies of photographs (reqd. only if the applicant is an individual)
|1. No documents needed for offline TAN no application
2. In online instances, a signed acknowledgement is enough.
|Application costs||1. Rs. 93 plus GST for Indians.
2. Rs. 864 plus GST for foreigners.
|Rs. 55 plus GST.|
For all problems pertaining to TAN, including instances where one wishes to cancel the number, an individual can visit NSDL’s official website and make the necessary changes.
Please note that the Government of India has been planning a makeover of this prevailing system for applying for and receiving a TAN number. Already, the CBDT and the Ministry of Corporate Affairs (MCA) have issued orders which does away with filing both TAN and PAN for organisations.
Instead, a single form, called ‘SPICe’ form or Form INC-32 will cover the basics. These are plans to encourage the ‘Ease of Doing Business’ in the country and are expected to help bolster the growth of businesses in the future.
The status of the application can also be found out by calling on the number :- 020 – 27218080 or through sending an SMS to 57575 typing “NSDLTAN”