Tax Deduction and Collection Account Number – TAN

What is TAN?

TAN stands for Tax Deduction and Collection Account Number. It is a ten digit alphanumeric number thats allotted to those who are supposed to deduct tax at source or TDS. TAN number or TAN registration is very important for businesses deducting tax at source and is required to be quoted in TDS or TCS return. Failure to apply TAN when required can attract a penalty. Once TAN is obtained, TDS returns must be filed quarterly by the business.

Why should I apply for TAN?

  1. When you’re depositing tax, you must quote TAN in documents. TAN is used for deductions such as salary, interest, or dividends. When depositing tax, you must undertake these steps:
  2. Use Challan type 281 for deposit of tax deducted or collected at source.
  3. It is important to quote the correct 10-digit TAN, along with name and address of the deductor on each challan used for depositing tax. The TAN details can be verified from the official Income Tax website (www.incometaxindia.gov.in), before depositing TDS or TCS.
  4. For indicating separate sections and the correct nature of payment code in relevant columns, you can use separate challans.
  5. TAN is a unique identification number given to those who are deducting or collecting taxes at source, on behalf of the Income Tax Department, which makes every individual tax deductor or collector identifiable by his or her TAN.
  6. TDS Certificates must be issued by individuals or entities deducting or collecting tax at source. Issuance of these certificates are important so that a tax payee knows how much tax has been paid by him or her. It helps the tax payee understand the amount of tax that has been paid and deposited with the Government. Quoting your TAN is important, so you can procure these certificates easily.
  7. Generating Form 16 and Form 16A is simpler for TAN holders, through the NDSL Software.
  8. Once issued, TAN is valid for lifetime, and it can be cancelled using the ‘TAN Correction Form’, if you have stopped collecting or deducting tax. It is important to have a unique TAN. In case you have multiple TANs, you must surrender the one that is not in use, and continue with a unique TAN, which you use regularly.

How to apply for TAN?

There are two modes for applying for TAN: (1) Online mode and (ii) Offline mode. They are as follows:

  • OFFLINE—An application for allotment of TAN is to be filed in Form 49B in duplicate and submitted to any TIN-FC. Addresses of TIN-FCs are available at NSDL-TIN website (https://www.tin-nsdl.com).
  • In case of an applicant, being a company which has not been registered under the
  • Companies Act, 2013, the application for allotment of Tax Deduction Account Number may be made in Form No. INC-32 (SPICe) specified under sub-section (1) of section 7 of the said Act for incorporation of the company.
  • ONLINE—Online application for TAN can be made from the website of NSDL-TIN Website. The deductor can apply for TAN online at NSDL-TIN website (https://tin.tin.nsdl.com/tan/index.html)

(1) On confirmation of correct uploading of online application, an acknowledgement will be displayed on screen. The acknowledgement consists of:

Unique 14-digit acknowledgement number

Status of the applicant

Name of the applicant

Contact details

Payment details

Space for signature

(2) Applicant has to save the acknowledgment and should obtain a print of the same.

(3) The applicant should sign the acknowledgment. Signature should only be within the box provided in the acknowledgement.

(4) In case of applicants other than individual, the authorised signatory shall sign the acknowledgement and affix the appropriate seal or stamp.

(5) Thumb impression, if used, should be attested by Magistrate/Notary Public/Gazetted Officer under his official seal and stamp.

Payment:

(1) The applicant has to make the payment of processing fee which is Rs 55 + service tax (as applicable)

(2) Payment can be made by

Demand draft

Cheque

E-payment (for mode and other procedure applicable in case of e-payment visit https://tin.tin.nsdl.com/tan/form49B.html)

(3) Demand draft/Cheque shall be in favour of NSDL-TIN.

(4) Name of applicant and acknowledgement number should be mentioned on reverse of DD/Cheque.

(5) DD shall be payable at Mumbai.

(6) Applicant making payment by cheque shall deposit a local cheque (drawn on any bank) with any HDFC Bank across the country (except Dahej) . The applicant shall mention TANNSDL on deposit slip.

[As amended by Finance (No. 2) Act, 2019]

On successful payment by e-payment mode an acknowledgement will be displayed.

Applicant shall save and print the acknowledgement and send it to NSDL as mentioned in “submission of document”.

Submission of documents:

(a) The duly signed acknowledgement along with DD, if any, shall be sent to NSDL at NSDL – e – Governance Infrastructure Limited, 5th floor, Mantri Sterling, Plot No. 341, Survey No. 997/8, Model colony, Near Deep Bungalow chowk, Pune – 411016.

(b) Superscribe the envelope with .APPLICATION FOR TAN – Acknowledgement number..

(c) It should reach NSDL within 15 days from the date of online application

(d) Application will be processed only on receipt of duly signed acknowledgement and realisation of payment.

Places from where to obtain Form 49B

(1) Form 49B is freely downloadable from the website of Income-tax Department (http://www.incometaxindia.gov.in)

(2) It is also available at TIN-FCs.

(3) Legible photocopies of Form 49B or forms legibly printed exactly as per the format prescribed by Income-tax Department are also allowed to be used.

Proofs required for TAN Application:

No documents are required to be submitted along with application for allotment of TAN. However, for online application, the signed acknowledgment which is generated after filling up the form is to be forwarded to NSDL.