Article discusses about Meaning/Structure/Relevance of TAN, Persons liable to apply for TAN, Consequences of not quoting TAN, Procedure to obtain TAN, Places from where to obtain Form 49B, Authority empowered to allot TAN, Procedure for online TAN application.
Meaning of TAN
Tax Deduction Account Number or Tax Collection Account Number is a 10-digit alphanumeric number issued by the Income-tax Department (we will refer to it as TAN). TAN is to be obtained by all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS).
Structure of TAN
First 4 digits of TAN are alphabets, the next 5 digits of TAN are numeric and last digit is an alphabet.
First 3 alphabets of TAN represent the jurisdiction code, 4th alphabet is the initial of the name of the TAN holder who can be a company, firm, individual, etc. For example, TAN allotted to Mr. Mahesh of Delhi may appear as under:
DEL M 12345 L
Jurisdiction Code Name of deductee
Persons liable to apply for TAN
Every person liable to deduct tax at source or collect tax at source is required to obtain TAN. However, a person required to deduct tax under section 194IA orsection 194-IB or section 194M can use PAN in place of TAN as such person is not required to obtain TAN.
(1) Section 194IA provides for deduction of tax at source from payment on transfer of certain immovable property other than agricultural land.
(2) section 194-IB provides for deduction of tax at source at the rate of 5% from payment of rent. The tax 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) section 194M provide for deduction of tax at source at the rate of 5% 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. This provision is applicable on individual and HUF, who are not covered under section 194C, section 194H and section 194J.
Relevance of TAN
As per section 203A 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 following documents:
(a) TDS statements i.e. return
(b) TCS statements i.e. return
(c) Statement of financial transactions or reportable accounts
(d) Challans for payment of TDS/TCS
(e) TDS/TCS certificates
(f) Other documents as may be prescribed
Consequences of not quoting TAN / Why is it necessary to have TAN?
As per section 203A 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 (including any e-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 obtain TAN
There are two modes for applying for TAN: (1) Online mode and (ii) Offline mode. They are as follows:
OFFLINE—An application for allotment of TAN is to be filed in Form 49B in duplicate and submitted to any TIN-FC. Addresses of TIN-FCs are available at NSDL-TIN website (https://www.tin-nsdl.com).
In case of an applicant, being a company which has not been registered under the Companies Act, 2013, the application for allotment of Tax Deduction Account Number may be made in Form No. INC-32 (SPICe) specified under sub-section (1) of section 7 of the said Act for incorporation of the company.
ONLINE—Online application for TAN can be made from the website of NSDL-TIN website.
Places from where to obtain Form 49B
(1) Form 49B is freely downloadable from the website of Income-tax Department (http://www.incometaxindia.gov.in)
(2) It is also available at TIN-FCs.
(3) Legible photocopies of Form 49B or forms legibly printed exactly as per the format prescribed by Income-tax Department are also allowed to be used.
Authority empowered to allot TAN
TAN is allotted by the Income-tax Department on the basis of the application submitted online at NSDL-TIN website or offline to TIN-FC managed by NSDL. NSDL will intimate TAN to the applicant at the address specified in the application.
Documents to be submitted along with TAN application
No documents are required to be submitted along with application for allotment of TAN. However, for online application, the signed acknowledgment which is generated after filling up the form is to be forwarded to NSDL.
Procedure for online TAN application
The deductor can apply for TAN online at NSDL-TIN website (https://tin.tin.nsdl.com/tan/index.html)
(1) On confirmation of correct uploading of online application, an acknowledgement will be displayed on screen. The acknowledgement consists of:
(2) Applicant has to save the acknowledgment and should obtain a print of the same.
(3) The applicant should sign the acknowledgment. Signature should only be within the box provided in the acknowledgement.
(4) In case of applicants other than individual, the authorised signatory shall sign the acknowledgement and affix the appropriate seal or stamp.
(5) Thumb impression, if used, should be attested by Magistrate/Notary Public/Gazetted Officer under his official seal and stamp.
(1) The applicant has to make the payment of processing fee which is Rs 55 + GST (as applicable)
(2) Payment can be made by
(3) Demand draft/Cheque shall be in favour of NSDL-TIN.
(4) Name of applicant and acknowledgement number should be mentioned on reverse of DD/Cheque.
(5) DD shall be payable at Mumbai.
(6) Applicant making payment by cheque shall deposit a local cheque (drawn on any bank) with any HDFC Bank across the country (except Dahej). The applicant shall mention TANNSDL on deposit slip.
On successful payment by e-payment mode an acknowledgement will be displayed. Applicant shall save and print the acknowledgement and send it to NSDL as mentioned in “submission of document”.
Submission of documents:
(a) The duly signed acknowledgement along with DD, if any, shall be sent to
NSDL at NSDL – e – Governance Infrastructure Limited,
5th floor, Mantri Sterling,
Plot No. 341, Survey No. 997/8,
Model colony, Near Deep Bungalow chowk,
Pune – 411016.
(b) Superscribe the envelope with .APPLICATION FOR TAN – Acknowledgement number..
(c) It should reach NSDL within 15 days from the date of online application
(d) Application will be processed only on receipt of duly signed acknowledgement and realisation of payment.
No separate TAN is required to obtain for the purpose of TCS / Is a separate TAN required to be obtained for the purpose of tax collection at source?
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.
How to find the address of nearest TIN-FC?
Addresses of all TIN-FC are available on NSDL-TIN website (https://www.tin-nsdl.com).
Single TAN is to be used in case of deductor who has to deduct tax from different types of payment such as salary, interest payment, etc.
TAN once allotted can be used for all types of deduction and collection. In other words, it is not necessary to apply for different TAN if the deductor has to deduct tax from different types of payment such as salary, interest payment, etc.
Enquire about the status of TAN application
After making the application for allotment of TAN, the deductor can enquire about the status of his application by accessing NSDL-TIN website at status track option and by quoting the unique 14-digit acknowledgement number after three days of his application. This facility can be accessed from the website of Income-tax Department too (www.incometaxindia.gov.in).
Government deductors are also liable to obtain TAN
Like Non-Government deductors, the Government deductors are also required to apply for TAN.
PAN cannot be quoted in place of TAN
PAN should never be quoted in the field where TAN is required to be quoted. In other words, the deductor/collector cannot quote his PAN in place of TAN. If he does not possess TAN, then he has to apply for the same. However, a person required to deduct tax under section 194-IA can use PAN in place of TAN as such person is not required to obtain TAN.
Taxpayer cannot hold more than one 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 more than one TAN have been allotted, then the TAN which is being used regularly should be continued and the other TAN(s) should immediately be surrendered for cancellation using “Form for changes or correction in TAN” which can be downloaded from NSDL-TIN website or may be procured from TIN-FC.
Changes in the basic data communicated at the time of making the application for allotment of TAN
Any change or correction in the data associated with TAN should be communicated to the Income-tax Department by filing up “Form for changes or correction in TAN data for TAN allotted” along with necessary fees at any of the TIN-FCs or NSDL-TIN website.
Can an e-TDS return be filed without TAN or in case TAN has not been alloted?
Quoting of TAN is mandatory in TDS and TCS returns, whether filed in paper or electronic format. The returns, whether in paper or electronic format, will not be received in case TAN is not quoted.
What is 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 has been allotted, which TAN should be used?
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 ).
What do we have to do if we have been allotted a duplicate TAN by oversight?
In case duplicate TAN has been allotted, an application should be made for cancellation of the TAN which has not been used. Application for cancellation of TAN is to be made in the “Form for Changes or Correction in TAN” which can be downloaded from the website of NSDL ( https://www.tin-nsdl.com ) or obtained from any other source. The application is also available at TIN Facilitation Centres.
Can we quote Permanent Account Number (PAN) in place of TAN?
No. PAN should never be quoted in the field where TAN is required to be quoted. The purposes for which PAN and TAN are allotted are different. 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, a person required to deduct TDS as per section 194IA or section 194IB or section 194M, can use PAN in place of TAN.
How can any change in address or details on the basis of which TAN was allotted be rectified?
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
In case of multiple DDOs, should all of them apply for TAN?
Yes. In such a case, the name of the Division, name and location of branch or the designation of the person responsible for deducting/collecting tax, whichever is applicable, should be clearly given in the application for allotment of TAN.
What if incomplete form 49B is submitted?
The TIN Facilitation Centre will assist the applicant to correctly fill up Form 49B but incomplete or deficient application will not be accepted.
Can an application for TAN be made on a plain paper?
No. TAN Application can be made only on Form 49B. The application form can be downloaded from the website of the Income Tax Department (www.incometaxindia.gov.in) or NSDL ( https://www.tin-nsdl.com ) or obtained from any other source. The application is also available at TIN Facilitation Centres.
Can form 49B be filled on a typewriter?
Yes. But typing should be in capital letters with good impression.