TAN stands for Tax Deduction and Collection Account Number. It’s a unique 10-character alphanumeric code issued by the Income Tax Department of India. Entities responsible for deducting or collecting tax at source (TDS/TCS) must obtain a TAN.
Structure of TAN
A TAN comprises:
- First 4 characters: Alphabets (first three denote the jurisdiction code, and the fourth is the initial of the name).
- Next 5 characters: Numeric digits.
- Last character: Alphabet.
For example, a TAN might look like DELX12345A, where:
- DEL: Jurisdiction code (e.g., Delhi).
- X: First letter of the name.
- 12345: Unique number.
- A: Check alphabet.
Who Needs a TAN?
Any person or entity responsible for deducting or collecting tax at source under the Income Tax Act must obtain a TAN. This includes:
- Companies.
- Firms.
- Individuals (proprietors) deducting TDS.
- Government departments.
- Trusts and societies.
Note: Individuals deducting TDS under sections 194-IA, 194-IB, or 194M can use their PAN instead of TAN.
How to Apply for TAN
You can apply for TAN either online or offline.
Online Application
- Visit the NSDL-TIN website.
- Select “Apply Online” and choose the appropriate category.
- Fill in Form 49B with the required details.
- Submit the form and note the 14-digit acknowledgment number.
- Print and sign the acknowledgment.
- Send the acknowledgment to:
Protean eGov Technologies Limited
4th Floor, Sapphire Chambers,
Baner Road, Baner, Pune – 411045
Note: If applying with a Digital Signature Certificate (DSC), there’s no need to send a physical acknowledgment.
Offline Application
- Obtain Form 49B from a TIN-Facilitation Center (TIN-FC).
- Fill in the form with the necessary details.
- Submit the form at the TIN-FC along with the processing fee.
Processing Fee
The processing fee for TAN application is ₹65 (₹55 application charge + 18% GST).
TAN vs PAN: Key Differences
| Feature | TAN (Tax Deduction and Collection Account Number) | PAN (Permanent Account Number) |
|---|---|---|
| Purpose | For deducting/collecting tax at source (TDS/TCS) | For tracking financial transactions |
| Issued To | Entities deducting/collecting tax | Individuals and entities |
| Format | 10-character alphanumeric | 10-character alphanumeric |
| Application Form | Form 49B | Form 49A (Indians), Form 49AA (foreigners) |
| Legal Provision | Section 203A of the Income Tax Act, 1961 | Section 139A of the Income Tax Act, 1961 |
| Penalty for Non-Compliance | ₹10,000 | ₹10,000 |
Penalty for Non-Compliance
Failure to apply for TAN or not quoting it in the specified documents can attract a penalty of ₹10,000 under Section 272BB of the Income Tax Act.
Understanding the distinctions between TAN and PAN is crucial for compliance with Indian tax regulations. Ensure you apply for and quote the correct identification numbers in all relevant financial documents.
