What Is TAN?

5paisa Research Team Date: 12 May, 2023 04:43 PM IST

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Introduction

TAN refers to the Tax Deduction and Collection Account Number. The Income Tax Department issue a unique 10-digit alphanumeric number to entities that are required to deduct or collect tax on behalf of the government. 

The government uses TAT to track and verify the tax payments made. The Income Tax Act 1961 covers TAN meaning, who should apply for it, what is TAN, its structure, the TAN application process, the documents required for TAN application, and the use of the TAN number. This blog explains what is TAN number and what is TAN in full form with everything else you need to know about TAN.
 

Who Should Apply for TAN?

It is mandatory to quote TAN on all TDS or TCS returns. Therefore, entities required to deduct tax at source (TDS) or collect tax at source (TCS) as per the Income Tax Act, 1961, must apply for TAN. 

TDS is a system of collecting tax at the source of income, and the responsibility of deducting the tax lies with the person making the payment. Conversely, TCS is the tax the seller collects from the buyer of goods or services at the time of sale.

Thus, businesses, organisations, individuals, and government agencies can apply for TAN. Failure to obtain a TAN can result in penalties and legal action.
 

Importance of TAN Number

1.    Track TDS and TCS payments: 

TAN helps track and verify the tax payments made by the entity to the government. An entity must quote TAN in the following documents.

a.    TCS or TDS returns
b.    Challans for TDS or TCS payments
c.    Submission of TCS or TDS certificates
d.    Collection or submission of IT-related forms

2.    Unique Identification Number

TAN is a unique identification number that helps identify the entity making the tax payment. Therefore, it reduces the chances of fraud and ensures that the authorised entity makes the tax payment.
 

Structure of TAN

A TAN consists of ten characters and has a distinctive structure. It includes four alphabets, five digits, and one alphabet. For example, a TAN could be AAABA1234Z.

1.    The first four characters are letters. The first three letters represent the jurisdiction, whereas the fourth character is the applicant's initial. 
2.    The next five characters are numbers. It is a unique code, auto-generated from the system.  
3.    The last character is a letter at the end and is a random, system-generated letter. 
 

TAN Application Process

Entities can apply for TAN through both offline and online modes. The process for both is as follows.

A.    Offline Application of Allotment of TAN

Entities need to follow the steps given below to apply for TAN offline:

a.    Download Form 49B: The entity needs to download Form 49B from the Income Tax Department's website.

b.    Fill out the form: The applicant must complete the form with all the required details. The input must be in block letters using black ink.

c.    Submit the form: The entity must submit the filled form and the required documents at any TIN Facilitation Center.

d.    Fee Payment: The entity must pay the processing fee while submitting the form.

e.    Acknowledgement: The entity will receive an acknowledgement after submitting the form. The entity can track the status of the TAN application with the same.

B.    Online Application of Allotment of TAN

a.    Form 49B: To apply for the TAN online, you can visit the NSDL website and complete Form 49B online. Enter your name, address, and other details related to a tax deduction or collection.

b.    Acknowledgement: You will receive an acknowledgement number on the form submission. Print the acknowledgement number and share it with the NSDL offices in Pune. 

c.    Fee Payment: You may pay the requisite fees online through a cheque or demand draft. 

d.    TAN Details: The Income Tax Department will verify details and issue a TAN number to the applicant via email or post to the registered address. 
 

Documents Required for TAN Application

When applying for a TAN, you must submit proof of identity and address such as a PAN card, passport, voter ID, or driving license.

Use of TAN Number

An entity must quote its TAN for salary, interest, and dividend payments. 

It is mandatory to quote the TAN in returns, challans and certificates. Hence, TAN auto-captures the complete address of the person who deducts tax on behalf of the IT department. It also captures the Postal Index Number recorded with Income Tax Department.

If a person has more than one TAN, it is illegal. But different branches or divisions of a collector can apply for separate TAN for each.
 

TAN Number Rectification and Other Issues

You can apply for TAN correction online through the NSDL website. You must furnish the following documents with your application.

●    Proof of your current TAN
●    TAN allotment letter or proof of TAN details
●    Proof of TAN that is to be surrendered or cancelled
●    Relevant documented proof to support your request to change or correct certain particulars in your TAN

You can also address other issues related to TAN by contacting NSDL customer support.
 

TAN Application Fee

The TAN application fee is currently Rs. 65 + GST. You can make the payment online through the NSDL website.

TAN Search

You can search for TAN by name, PAN, or TAN number using their website's NSDL TAN search facility with the following steps:

a.    Select the 'Quick Links' section on the home page and click the 'Know PAN Details' tab.
b.    Choose the category of the deductor and input the deductor's name and state. 
c.    Enter your mobile number and click on the 'Continue' button. Verify with OTP, and you can access a list of records that matches the deductor's name.
d.    If you click on the deductor's name, you can view the deductor's basic and AO details.
 

Customer Support for TAN

NSDL provides customer support for TAN-related queries through their toll-free number and email support. You can contact NDSL at 20 – 27218080 or SMS to 57575 by typing "NSDLTAN."

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Frequently Asked Questions

The Income Tax Department of India provides TAN through NSDL (National Securities Depository Limited) and UTIITSL (UTI Infrastructure Technology and Services Limited). You can apply through National Securities Depository Limited (NSDL)-Tax Information Network (TIN) website or facilitation centres.

 Yes, you must pay a fee of Rs. 65 + GST for the TAN application.

Yes, you can make online payments through the NSDL website through debit, credit cards, or net banking.

You can use the same TAN for tax deductions (TDS) and collection (TCS). It is not mandatory to get a different number. 

Yes, you will need to submit proof of identity and address.

NSDL will email you your TAN number along with the allotment letter or post it to the address mentioned in your application.

Yes, you can track the status of your TAN application online through the NSDL website. You can refer to the 'Status Track' section of the NSDL-TIN website after three days from the application. You will require the fourteen-digit acknowledgement letter. 

You can apply for TAN correction to update your TAN to the new format. You can cross reference your TAN number with the TIN-FCs, who will help you get the updated TAN. 

Alternatively, you can check in in the online database. You can input your old TAN, and the system will generate a new one. 
 

TAN rejection can be due to the following reasons.

a.    Incorrect or incomplete filling of Form 49B
b.    Error is processing the fee payment
c.    Existing TAN in the applicant's name

You can reapply for TAN and make sure to rectify any errors that led to the rejection of your previous application. Ensure you complete Form 49B correctly before submission to NSDL. You may visit the nearest TIN facilitation centre for assistance. 

Verify your payment processing – if the payment is via cheque, maintain sufficient funds in your bank account. Avoid the mistakes from your previous form and rectify them.