Last Updated on July 12, 2021 by Ravi Sankar Robbi
What is TAN number in Income Tax
This article deals with What is TAN number in Income Tax. TAN is 10-digit alphanumeric number issued by the Income-tax Department to Tax Deductors & Tax Collectors and such TAN number has to quoted in the returns or statements filed under TDS and TCS mechanism.
- What is TAN
- TAN number format
- Who is liable to apply for TAN
- Quoting of TAN
- Procedure to obtain TAN
What is TAN number in Income Tax
TAN number stands for Tax Deduction and Collection Account Number. It is a 10-digit alphanumeric number issued by the Income-tax Department.
TAN number format
The first 3 alphabets of TAN represents the jurisdiction code, 4th alphabet is the initial of the name of the TAN holder, next 5 digits of the TAN are system generated numbers between 00001 to 99999 and the last character is an alphabetic check digit.
Who is liable to apply for TAN?
Having a TAN number is not mandatory for every person. As per Sec 203A, every person who is liable to deduct tax at source (TDS) or collect tax at source (TCS) is required to obtain TAN.
However, a person who is required to deduct tax under Section 194-IA, 194-IB & 194M can use PAN in place of TAN as they are NOT required to obtain TAN.
Quoting of TAN
Every person who has deducted TDS or collected TCS, they need to quote TAN mandatorily in the following documents:
- TDS statements i.e. return
- TCS statements i.e. return
- Statement of Financial transactions or Reportable Accounts
- Challans for payment of TDS
- TDS/TCS certificates
- Other documents as may be prescribed
Under Income Tax Act, both failure to obtain and quoting the incorrect TAN attracts penalty.
Failure to obtain TAN: A penalty of Rs. 10,000 may be imposed – Section 272BB(1)
For quoting incorrect TAN: A penalty of Rs. 10,000 may be imposed – Section 272BB(1A)
However, the opportunity of being heard will be given by the AO to the assessee before imposing such a penalty.
Procedure to obtain TAN
An application for allotment of TAN can be made either offline or online methods.
Offline: Duly filled application in Form No. 49B (It can be downloaded from https://www.incometaxindia.gov.in or at TIN-FCs) shall be submitted in duplicate at any TIN Facilitation Centers (TIN-FC). Addresses of TIN-FCs are available at NSDL-TIN website. (https://www.tin-nsdl.com)
Online: Online application can be made from the website of NSDL-TIN website (https://tin.tin.nsdl.com/tan/form49B.html)
Can I hold more than one TAN?
No person shall hold more than one TAN. However, different branches/units of an entity may have separate TAN. If more than one TAN is allotted, then the one which is being used regularly should be retained and the other one has to be surrendered for cancellation using Form for changes or correction in TAN which can be downloaded from NSDL-TIN website or may be procured from TIN-FC.
How to change the details furnished for obtaining TAN?
Any change or correction in the data furnished for obtaining TAN should be communicated to the Income-tax Department by filing up Form for changes or correction in TAN data for TAN allotted along with necessary fees at any of the TIN-FCs or NSDL-TIN website.
Can I quote my PAN instead of TAN
No. You cannot. Deductor/Collector cannot quote his PAN in place of TAN. If he does not possess TAN, then he has to apply for the same.
However, a person required to deduct tax under section 194-IA, 194IB & 194M can use PAN in place of TAN as such a person is not required to obtain TAN.
Y & Co, a partnership firm running a business that is not covered under tax audit u/s 44AB. However, during the previous year, it paid Rs. 25,000 towards advocate fee. Do they need to apply for TAN?
Not required. If the payments are covered under TDS then the requirement for TAN arises. In the above case, TDS is applicable only if the payment for professional services exceeds Rs. 30,000 in a financial year. As there is no TDS, applying for TAN doesnot arise in this case.
Is separate TAN required for TCS?
No. TAN allotted for TDS can be used for the purpose of TCS also
Single TAN is enough for all payments covered under TDS?
TAN once allotted can be used for all types of deduction and collection.
Are Government deductors are also liable to obtain TAN?
Yes. If they are liable to deduct/collect taxes, they need to apply.
Author is a Qualified CMA with an experience of more than 8 years in the industry. He is also an All India Rank holder in both Inter (AIR-26) & Final (AIR-46) examinations of ICAI. He loves to writes articles on Income Tax & GST.