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TAX ACCOUNT NUMBER (TAN)

TAN is a unique identification number allotted by the Income tax department.It is a number under which all taxes deducted or collected by the entity on the payment made is to be deposited. It enables the assesses receiving payment to claim tax deducted on their Income Tax Return. An entity must have only one TAN card

Tax Account Number
 
Tax Account Number

Tan Number is a ten-digit alphanumeric number which is allotted to by NSDL to tax deductors. This is unique number allotted for the purpose of TDS related accounting by the income tax department in India. This alpha numeric number is required to be obtained by all the individuals who are liable to deduct or collect the tax. Moreover, it is also obligatory to quote TAN in all TDS/TCS certificates, returns and payment challans. It is to be noted that each tax deductor is separately recognised by a TAN and the first three characters of TAN Number represent the state or city where the TAN has been issued.

Online Acknowledgement of TAN Application Consists of :

  • Applicant’s Status
  • Applicant’s Name
  • Details of Payment
  • Space for Signature
  • A distinct 14 digit acknowledgement number
  • Applicant’s Contact Details including e-mail, address and telephone number

TAN number is simply the tax accounting number, also known as tax deduction number. In order to apply for TAN Registration in India , TAN Application in form no 49B is to be made by the tax deductor and needs to be signed by the proprietor in case of proprietorship firm, by any partner of a firm or any designated partner in case of LLP, by any director in case of a company.

The TAN number can be applied only after permanent account number (PAN) is allotted to the applicant. Hence before an application for allotment of tan number is made the assesses must get his pan card made. There is no card which department issues but sends a letter quoting ten-digit tan number to the assesses.

Section 203A of the Income-tax Act 1961 makes it mandatory for all assesses who is liable to deduct TDS to acquire the TAN number and use the same on all communication related to tax deduction number. Any non-compliance of section 2013A invites a penalty of Rs. 10,000/-

Income Tax law cast an obligation on the Company/LLP making specified payments to other persons to deduct Tax at prescribed rates known as TDS. The deducted Tax need to be deposited Income Tax Department and subsequently, a TDS return has to be filed. To comply with the above provisions of law the Income Tax department allots a unique tax account number also known as TAN. In all challans of TDS and its return the same need to be quoted by the company or LLP. To apply for a TAN an application needs to be made in Form No. 49B. As explained above in case the company is incorporated using an e-Spice form then there is no need to apply for TAN as the same is allocated during the incorporation process itself.

Frequently Asked Questions

Q1. Which process needs to be followed in order to obtain a TAN?

Ans: An application needs to be signed for the allotment of Tax Deduction Account Number. The application must be filed in Form 49B and then needs to be submitted to any TIN-FC (Tax Information Network Facilitation Centre).

Q2. From where you can get Form 49B?

Ans: Form 49B can be downloaded from NSDL-TIN website. Also, it can be obtained from the website of TIN-FCs. It is to be noted that legible photocopies of Form 49B or forms legibly printed as per the format prescribed by ITD can also be used.

Q3. Why is it important to have TAN?

Ans: It is important to have TAN because it needs to be quoted in all the TDS/TCS returns, all TDS/TCS payment challans and all TDS/TCS certificates that are to be issued. Failure in TAN quoting and non-acceptance of challans for TDS/TCS payments by banks do not allow the TDS/TCS returns to be received. Apart from this, not applying for TAN or not quoting it in the prescribed documents leads to the penalty of Rs. 10,000/-.

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