Know everything about TAN

About TAN

TAN stands for Tax Deduction and Collection Account Number. TAN is a 10-digit alpha numeric number required to be obtained by all persons who are responsible for deducting tax at source or collecting tax at source. It is compulsory to quote TAN in TDS/TCS return, any TDS/TCS payment challan, TDS/TCS certificates, Annual Information Return and other documents as may be prescribed. ​

Applicability of TAN

​​​​​​​Any person who is liable to deduct tax at source (TDS) or collect tax at source (TCS) is required to obtain TAN. However, following persons can use PAN in place of TAN as such person is not required to obtain TAN:

(1) a person required to deduct tax under section 194IA. Section 194IA covers deduction of tax at source from payment on transfer of certain immovable property other than agricultural land.

(2) a person required to deduct tax under section 194-IB. Section 194-IB covers deduction of tax at source from payment of rent. The tax @ 5% shall be deducted if the rent paid or payable exceeds Rs. 50,000 per month or part of the month. This provision is applicable on individual and HUF, who is not liable to tax audit under Section 44AB in the immediately preceding financial year.

(3) a person required to deduct tax under section 194M. Section 194M provide for deduction of tax at source on the sum paid or credited, to a resident, on account of contractual work, commission (not being insurance commission referred to in section 194D), brokerage or professional fees, by an individual or a HUF, if aggregate of such sum exceeds Rs. 50 lakhs in a financial year, @5%. This provision is applicable on individual and HUF, who are not covered under section 194C, section 194H and section 194J.

Requirement to have TAN

​​​​​​​​​As per section 2​03A of the Income-tax Act, 1961, every person who deducts or collects tax at source has to apply for the allotment of TAN. Section 203A also makes it mandatory to quote TAN in TDS/TCS return, any TDS/TCS payment challan, TDS/TCS certificates and other documents as may be prescribed.

As per section 272BB, failure to apply for TAN or not quoting the TAN in the specified documents attracts a penalty of Rs. 10,000/-.

Procedure to apply for TAN

​​​​​​​TAN can be applied in two ways:

• Online mode
• Offline mode

1. OFFLINE—An application for allotment of TAN is to be filed in Form 49B in duplicate and submitted to any TIN Facilitation Centres. You can find Addresses of TIN Facilitation Centres at NSDL-TIN website (https://www.tin-nsdl.com).

In case of a new company to be registered under Companies Act 2013, the application for allotment of Tax Deduction Account Number may be made in Form No. SPICe (INC-32) specified under sub-section (1) of section 7 of the said Act for incorporation of the company. ​

2. ONLINE—Online application for TAN can be made from the NSDL-TIN website.

After submission of online / offline application, TAN is allotted by the Income Tax Department on the basis of the application submitted to TIN Facilitation Centres (TIN-FC) managed by NSDL. NSDL will intimate the TAN which will be required to be mentioned in all future correspondence relating to TDS/TCS in whatever form.

Note:

1. TAN once allotted can be used for all type of deductions Salary, Rent, Contractor, Professional etc. It can also be used in case tax is being collected at source.
2. Govt. Deductors also required to apply for TAN

Documents required for submitting TAN application

There is no need to attach any document with Form 49Bi.e. the application for allotment of TAN.

But in case of online application, the acknowledgment which is generated after online filling up the form will be required to be forwarded to NSDL. Detailed guidelines for the submission of application are available at https://www.tin-nsdl.com. But note that incomplete or deficient application will not be accepted.​

Fee for filing application for TAN

a) Currently the fee for filing the TAN application is Rs. 00 (55.00 application charge+ 18.00% Goods & Services Tax).

b) Payment can be made by

–  demand draft or

–  cheque or

–  credit card / debit card or

–  net banking

(c)  Demand draft / cheque shall be in favor of ‘NSDL – TIN’.

(d)  Name of the applicant and the acknowledgment number should be mentioned on the reverse of the demand draft / cheque.

(e)  Demand draft shall be payable at Mumbai.

(f)  Applicants making payment by cheque shall deposit a local cheque (drawn on any bank) with any HDFC Bank branch across the country (except Dahej). The applicant shall mention TANNSDL on the deposit slip. List of HDFC Bank Branches.

Verification of your TAN

TAN can be verified from the information on the website of Income Tax Department at www.incometaxindia.gov.in . Using the “Know Your TAN” facility at www.incometaxindia.gov.in or https://incometaxindiaefiling.gov.in the deductor can know his TAN.

Checking the status of the TAN application

The status of TAN application can he checked by using the “Track your PAN/TAN Application Status” from www.incometaxindia.gov.in or https://www.tin-nsdl.com .

There is no need for separate TAN for TDS and TCS

In case a TAN has already been allotted for the purpose of tax deduction at source (TDS), then no separate application needs to be made for obtaining separate TAN for the purpose of tax collection at source (TCS). The same number can be quoted in all returns, challans and certificates for TCS. However, if no TAN has been allotted, a duly filled in Form 49B, along with the application fees is to be submitted at any TIN-FC.​

Duplicate TAN

Duplicate TAN is a TAN which has been inadvertently obtained by a same person who is responsible for deducting/collecting tax and who already has a TAN allotted to him earlier. In other words, more than one TAN issued to a person is called duplicate TAN. It is illegal to possess or use more than one TAN. Different branches/divisions of an entity may, however, have separate TAN.

In case duplicate TAN(s) have been allotted to a person, then the TAN which has been used regularly should be used. The other TAN(s) should be surrendered for cancellation by using “Form for Changes or Correction in TAN” which can be downloaded from the website of NSDL ( https://www.tin-nsdl.com ).​

Quoting Permanent Account Number (PAN) in place of TAN

​​​​​The purposes for which PAN and TAN are allotted are different, so PAN should never be quoted in the field where TAN is required to be quoted.

TAN is a unique identification number which is allotted to persons who are required to deduct tax at source or collect tax at source.

PAN is a unique identification number issued to keep a linking of the transactions carried by a person like payment of tax, TDS/TCS credit, return of income, return of wealth, correspondence with the Income Tax Department or correspondence by the Income Tax Department, investments made by a person, loan taken by a person, etc.

However as explained above, a person required to deduct TDS as per section 194IA or section 194IB or section 194M​, can use PAN in place of TAN.

Rectification or changes in address or details on the basis of which TAN was allotted

If there is any change in the data provided in the application for allotment of TAN (i.e. data provide at the time of allotment of TAN), then such change is to be communicated to the Income Tax Department by intimating the change in, the “Form for Change or Correction in TAN data”. Duly filed form should be submitted to the TIN Facilitation Centres or an online application can be made at https://www.tin-nsdl.com

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