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What is TAN?
A Tax Deduction & Collection Account Number (TAN) is a unique 10 digit number with an alphanumeric combination, allotted by the Income Tax Department. As per the section 203A of the Income Tax Act 1961, any person liable to TDS (Tax Deducted at Source) and TCS (Tax Collection at Source) needs to quote the TAN in returns, challans, and any and all kinds of tax transactions and corespondence with National Securities Depository Ltd (NSDL).
Format of TAN
A TAN starts with the alphabets followed by the numericals and then ends with an alphabet. The first three letters denote the city and state of issuance, fourth letter is the first letter of tax deductor. This is followed by five numbers and the last letter makes the number unique which is different for everybody.
Eligibility for TAN
Any organization running a business and having employees, have to compulsorily apply for a TAN. This means, if you are any of the following legal entities paying salary or a commission, you will fall under the purview of TAN. The categories of applicants can be any of the following:
- Company/Branch/Division of a company
- Individual (Sole Proprietorship) / Branch of individual business
- Hindu Undivided Family (HUF)
- Firm / Branch of firm
- Association of Persons/Body of Individuals/ Association of Persons (Trusts)/Artificial Juridical Person
Difference between PAN and TAN
Permanent Account Number (PAN) is the unique identification number to file IT returns, usually for the salaried people or any other person who receives taxable income. While TAN is the unique identification number of the tax deductors, who are authorized to deduct TDS or TCS.
How to Apply for TAN?
Applying for a TAN is quite a simple process. It can be applied both online and off-line by submitting form 49B through the Tax Information Network Facilitation Centres (TIN – FC), managed by NSDL.
The best and easiest way to apply for a TAN is through www.tin-nsdl.com/index.php ,the online portal of TIN. Here is how you can do it.
- Fill up the TAN application form: The applicant has to fill Form 49B on this link https://tin.tin.nsdl.com/tan/form49B.html. Once the applicant selects the category under which he/she wants to apply for a TAN, the online form comes up.
If you need any help while filling up the form, you can visit this link For instructions on filling the form, one can refer to https://tin.tin.nsdl.com/tan/InstructionsTanRegistration.html, which is available both in the English and Hindi version. For any other doubts while filling the form, applicant can refer to https://tin.tin.nsdl.com/tan/GuidelinesTanRegistration.html.
- Make the payment: The fees for processing a TAN is Rs55/-, inclusive of 10.20% service tax, which makes the total payment as Rs62/-. The fee can be paid online through a credit card or net transfer after filling the form, but it will attract additional charges. Payment can also be made in cash at the TIN counter or by cheque/demand draft, which needs to be sent along with the acknowledgement form to the NSDL office. The demand draft or the cheque should be in favor of ‘NSDL-TIN’ payable at Mumbai.
- Sign & send the printed acknowledgement: Once payment is made online and requisite documents verified, the following are generated to the applicant:
- A 14-digit acknowledgement number
- Application Status
- Applicant’s Name
- Payment details
- Applicant’s address and contact details
- Space for signature
The applicant needs to send the printed acknowledgement duly signed to the NSDL office along if the demand draft or the cheque, if that is the payment mode.
- Allotment of TAN/Status tracking: After the application is received, the TAN is processed and allotted within five working days if the payment has been made online. The applicant will be intimated through the website regarding the allotment of TAN. The status can also tracked on the NSDL website. In case of any queries, applicant can reach the TIN helpdesk by phone.
If you are not net savvy or prefer the traditional route, then you can submit the form 49B at any of the TIN – FCs, along with the photocopies of the identity and address proofs of the deductor.
Penalty for Not Having TAN
It is mandatory to have a TAN and quote it in the requisite documents, defaulting which will lead to a penalty of Rs10,000. Even banks will also not accept TDS payments if the TAN is not mentioned in the requisite documents.
Changes/Corrections in TAN
For the surrender or cancellation of a TAN card, an applicant needs to use the ‘Form for Change and Correction in TAN Data’. The processing fee is same as that of getting a new TAN.
Only one TAN is allotted per entity. It is illegal to apply and have possession of duplicate or more than one TAN. However, an umbrella entity can have different TAN for its different branches or divisions in different cities. In case, you have been allotted a duplicate TAN, it should be immediately surrendered to TIN for cancellation, using the changes/correction form.