TAN stands for Tax Deduction and Collection Account Number. It is a unique 10-digit alphanumeric number issued by the Income Tax Department of India.
While PAN (Permanent Account Number) is primarily for all types of financial transactions and identifies an assessee (taxpayer), TAN is specifically for individuals or entities who are required to deduct tax at source (TDS) or collect tax at source (TCS) on behalf of the Income Tax Department.
Key Aspects of a TAN
Mandatory for TDS/TCS
If you are a person or entity (e.g., employer, company, government body, individual, HUF, firm, etc.) who makes certain payments that are subject to TDS (like salaries, rent, professional fees, interest, commission) or collects tax at source (like from sale of certain goods), you must obtain a TAN.
Unique Identifier for Deductors/Collectors
TAN serves as a unique identification number for all persons responsible for deducting or collecting tax at source.
Compulsory Quoting
It is mandatory to quote TAN in:
- All TDS/TCS returns (statements).
- All TDS/TCS payment challans.
- All TDS/TCS certificates (Form 16, Form 16A, etc.) issued to deductees/collectees.
- Any other documents prescribed in communications with the Income Tax Department related to TDS/TCS.
Penalty for Non-Compliance
Failure to obtain a TAN or not quoting it in the specified documents can attract a penalty of ₹10,000 under Section 272BB of the Income Tax Act, 1961.
Structure
A TAN is a 10-digit alphanumeric number. Its structure is similar to PAN, with specific characters indicating the city/state and the type of deductor.
- Example: DELA12345F
- First four characters are letters.
- Next five characters are numbers.
- Last character is a letter.
- The first three characters often represent the jurisdiction (e.g., DEL for Delhi).
- The fourth character often indicates the first letter of the name of the deductor/collector.
- Example: DELA12345F
Who Needs to Obtain a TAN?
Any person who is responsible for deducting or collecting tax at source under the Income Tax Act, 1961, must obtain a TAN. This includes, but is not limited to:
- Employers (for deducting TDS on salaries)
- Businesses paying rent above a certain threshold
- Businesses paying professional fees, commission, brokerage, interest, etc.
- Government organizations
- Companies, LLPs, Partnership Firms
- Sole Proprietors
- Hindu Undivided Families (HUFs)
- Individuals (e.g., if you are an individual paying rent exceeding ₹50,000 per month, you might need to deduct TDS under Section 194IB and quote PAN, not necessarily TAN in that specific case, but for other TDS sections, TAN is generally mandatory).
Important Exception: Section 194-IA (TDS on sale of immovable property), Section 194-IB (TDS on rent by individuals/HUFs not subject to audit), and Section 194M (TDS on certain payments by individuals/HUFs to contractors/professionals) allow the deductor to quote their PAN instead of a TAN. However, for most other TDS/TCS provisions, TAN is mandatory.
How to Apply for a TAN
The application for a TAN is done using Form 49B. The process is primarily online and can be done through the websites of the two authorized agencies:
- Protean eGov Technologies Limited (formerly NSDL e-Governance Infrastructure Limited): https://www.protean-tinpan.com/
2. UTI Infrastructure Technology And Services Limited (UTIITSL): https://www.utimf.com/investor-services/pan-card/ (Though Protean is more commonly used for TAN applications).
General Steps for Online Application (Form 49B):
Visit the Website
Go to the Protean (NSDL-TIN) website and navigate to the “TAN” section.
Select Application Type
Choose “Online Application for New TAN (Form 49B)”.
Select Category of Deductor
From the dropdown menu, select the category of the deductor/collector (e.g., Company, Individual, HUF, Firm, Government, etc.).
Fill Application Form
Fill in all the mandatory details in Form 49B, including:
- Name of the deductor/collector.
- Address.
- Contact details (email, phone number).
- Category of deductor.
- Existing PAN (if applicable).
- Details of the Assessing Officer (AO Code – often auto-populated based on other details, or can be looked up).
Review and Submit
Carefully review all the entered information for accuracy.
Make Payment
Pay the application fee online (currently ₹77.00, which includes application charge of ₹65.00 + 18% GST). Payment can be made via credit card, debit card, or net banking.
Generate Acknowledgement
Upon successful payment, an acknowledgement screen will be displayed, containing a unique 14-digit acknowledgement number.
Print and Send Acknowledgement (if required)
- For online applications where you upload scanned documents, you generally do not need to send physical documents.
- However, if you choose the option where no documents are uploaded online, you must print this acknowledgement, sign it, and send it by post/courier to the NSDL address mentioned on the acknowledgement within 15 days of the online application.
TAN Allotment
Once your application is processed and approved, the TAN will be allotted and intimated to you via email. A physical TAN allotment letter will also be dispatched to your communication address.
Documents Required for TAN Application
One significant difference from PAN application is that, for new TAN applications (Form 49B), no documents are generally required to be uploaded or submitted physically when applying online and choosing the paperless option. The application is largely based on self-declaration and verification against existing PAN data.
However, if you choose to send the acknowledgement physically, then only the signed acknowledgement needs to be sent. For offline applications, Form 49B is submitted in duplicate to a TIN-FC, and generally, no supporting documents are required with the form itself.
Maintaining Records
Even if you don’t submit physical documents during application, it is crucial to maintain all relevant records and proofs (like PAN, business registration documents, address proof, etc.) at your end for future reference or in case of any query from the tax authorities.
Get help from our tax experts for Tan registration. If you or your business is making payments on which tax needs to be deducted or collected at source, obtaining a TAN is a fundamental legal requirement for compliance with Indian tax laws.