Tax Deduction and Collection Account Number (TAN)
A Tax Deduction and Collection Account Number (TAN) is a compulsory 10-character alphanumeric identifier that must be obtained by any person responsible for deducting or collecting tax at source (TDS/TCS). This number must be quoted in all TDS/TCS returns, tax payments and any correspondence with the Income Tax Department related to TDS/TCS. Banks will not process TDS/TCS payments without a valid TAN. This requirement applies not only to residents but also to Non-Resident Indians (NRIs), who must obtain a TAN if they are obligated to deduct or collect tax under Indian tax regulations.
Process of Online TAN Application
- TAN can be applied online by making Payments through Demand Draft / Cheque / Credit Card / Debit Card / Net Banking. For making an online application for TAN, a person has to apply on the NSDL website.
- An offline application for TAN can be made by procuring the prescribed form from the TIN-FC Centres.
Requirements of TAN
It is mandatory to quote TAN in the following documents:
- TDS Statements i.e. returns
- TCS Statements i.e. returns
- Statements of financial transactions for reportable accounts
- Challans for payment of TDS/TCS
- TDS/TCS certificates etc
Correction/Modification in TAN
If there is any change in the particulars of TAN (i.e. change in data provided at the time of allotment of TAN), such change is required to be communicated in the prescribed form.
Penalty for failure to obtain TAN or furnishing the wrong TAN
A penalty is liable to be imposed under the Income Tax laws in case, a person deducting or collecting tax, fails to obtain the TAN or furnishes the wrong TAN on any document.
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