KNOW ABOUT TAN BEFORE DEDUCTING TDS


(Last Updated On: June 1, 2017)

What is TAN?

Tax Deduction/ Collection Account Number (TAN), is number which is required incase one becomes liable to deduct or collect tax at the time of making payment to another person (i.e. liable to deduct TDS or collect TCS).

What is the significance of obtaining TAN no.?

As per the tax laws of our country a person deducting TDS is required to deposit it to the treasury within specified period along with a return specifying the details as required by the government. Therefore, TAN acts as a unique identification number in all the correspondence with the department. This also enable the government to credit the tax receipt and give credit to the deductee (person whose TDS was deducted). This credit is reflected in the 26AS i.e. the tax credit statement.

How a TAN no. looks like?

TAN is a 10 digit alpha numeric number. Structure of TAN is as follows: ABCD12345E. So first 4 characters are alphabets followed by 5 digits and then 1 alphabet in the end. First 3 alphabets of TAN no. represent the city where TAN has been allotted, 4th character of the TAN no. represent the initial letter of the name of person. All 5 digits and the last alphabet are automated characters generated by system.

Are there any penalties if I don’t mention a TAN in my TDS return?

There are penalties in income tax act for both non-mentioning the TAN or mentioning incorrect TAN. Penalty of Rs. 10,000 is imposable in case of one does not mention TAN or mention incorrect TAN no. in TDS return.

What is the procedure of applying for TAN no.?

One can apply for TAN online at NSDL-TIN Website (https://tin.tin.nsdl.com/tan/index.html).

Still facing problem in applying for TAN no.? Don’t worry; mail us your details and we shall apply for TAN on your behalf.

CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.