The Tax Deduction and Collection Account Number (TAN) is required for people who are deducting or collecting tax at source. There is a penalty of Rs.10,000 for not quoting the TAN. Anyone paying a salary or commission is required to get a TAN.
What is TAN?
TAN is Tax Deduction and Collection Account Number. It is a 10 digit alphanumeric number. This number has to be attained by people who are accountable for deducting tax at source or collecting tax at source. It is compulsory to quote your TAN in TDS or TCS return, payment, certificates, Annual Information Return and other documents.
Every person whose taxes are deducted at source or those who collect tax at source are required to obtain TAN. If a person fails to apply for TAN or do not quote the TAN in the specified documents, then the person will get a penalty of Rs.10,000.
An applicant cannot provide their PAN number in the field where TAN is required to be mentioned and both these number serve different purposes. TAN is an unique identification number that is given to those who are deducting or collecting taxes at source on behalf of the Income Tax Department, PAN is an unique number given to assesses that is individuals and companies.
Who can Apply for TAN?
If you are paying salary or a commission to anyone else, you should have TAN. This includes central or state government or a local authority. It can be a statutory or an autonomous body, a company, a branch or a division of a company, individual or a Hindu Undivided Family, sole proprietor, firms, associations of persons or trusts.
How to Apply for TAN?
It is important for a person to apply for TAN. There are two ways to go about it. A person can apply for TAN through an offline application or through an online application.
Offline Application of Allotment of TAN:
If an applicant wishes to apply for TAN through the offline method, then he has to fill up the Form 49B in duplicate and submit it to any TIN (Tax Information Network) Facilitation Centres. If the applicant is a company that is not registered under the Companies Act 2003, then the application is to be made in Form No INC-7, this is specified in the Act of incorporation of the company in the sub-section (1) of Section 7.
After submitting the application, you must pay the processing fee by cash at TIN-FC counter. You can either pay the fee in the form or cash, cheque or demand draft.
Online Application of Allotment of TAN:
If an applicant, both individual and the company wishes to apply through the online mode, then they can visit the NSDL-TIN website.
After you have filled up the application, you need to make the fee payment of Rs.55 plus service tax that is applicable. The fee for processing TAN application is Rs.62 (Rs.55 + 10.20% service tax). You can use the credit card or debit card or net banking to make this payment. On making this payment, you will receive the 14 digit acknowledgement number, status of the application, name of the applicant, contact details, payment details and a space for signature. This acknowledgement needs to be printed out and duly signed and sent to NSDL at the given NSDL address during submission. This acknowledgement should reach the NSDL within 15 days of online submission.
Those who pay the processing fee through net banking, credit card or debit card will be issued a TAN within 5 working days. TAN will be intimated by e-mail and the TAN allotment letter will be dispatched on receipt of the signed acknowledgement.
The applicant must bear in mind that the TAN Application can be made on Form 49B only, you cannot type out the application request on a plain piece of paper. The application can however be typed on the Form 49B, the typing should be in capital letters.
Documents Required for TAN Application
While submitting your application for allotment of TAN, you need not submit any documents. But if you are submitting the application online, you need to sign the acknowledgement and forward it to NSDL address that will be provided to you.
Use of TAN Number
- TAN is used for deductions like salary, interest, dividend, etc.
- It can be used for returns, challans and certificates.
- It auto-captures 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 branch or division.
Correction of TAN
If you want to make any changes or corrections in the particulars mentioned in your TAN, then you can fill up a change request form available on NSDL website. You can also surrender your TAN for cancellation using the Form for Changes or Correction in TAN.
You need to submit the following documents along with your change request application:
- Proof of the TAN you are currently using.
- Proof of TAN that is to be surrendered or cancelled.
- TAN allotment letter or printout of TAN details.
- Relevant documented proof to support your request to change or correct certain particulars in your TAN.
FAQs on TAN
- Why should I apply for TAN?
Any person who deducts/collects tax at source – that is, anyone who is an employer who pays salaries and facilitates TDS – needs to have a TAN (Tax deduction and collection Account Number). If you do not have a TAN, you cannot deduct taxes from salaries and commissions to another person. If you are a union or state government authority, a local authority, a company, a branch or subsidiary of a company, a statutory or autonomous association, a trust, a sole proprietor, a Hindu Undivided Family, or an association of persons, you have to get a TAN to make legal salary transactions.
- Do I have to get a different TAN for TDS and another one for TCS?
No. Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) can be done through the same TAN. You do not need different TANs for different types of transactions.
- Is it okay if I have the PAN but not the TAN?
No. You have to obtain a TAN number if you are responsible for TDS or TCS. PAN is a unique number for individuals who pay tax. You cannot enter the PAN where a TAN is necessitated.
- Who provides the TAN?
The Income Tax Department allots TAN based on the application submitted by companies or employers. The application has to be submitted through National Securities Depository Limited (NSDL)-Tax Information Network (TIN) website or facilitation centres.
- How can I obtain TAN?
To get TAN, you can either apply online through the NSDL-TIN website, or visit a facilitation centre (FC) of TIN. You need to fill and submit Form 49B, which is available both online and at TIN-FCs. If you are not registered under the Companies Act, 2003, you need to fill and submit Form INC-7.
- How do I know where the FCs are?
The list of TIN facilitation centres is available on the NSDL-TIN website.
- Do I have to pay anything to get a TAN?
Yes. You have to pay the TAN processing fees of Rs. 63 – Rs. 55 application charge plus 14% service tax – via NSDL.
- Can I make online payments for TAN?
Yes. You can pay through credit and debit cards as well as through net banking.
- Do I have to submit any documents along with Form 49B?
You do not have to submit any documents if you are applying offline. For when submitting online, you have to print out the acknowledgement slip that confirms your online submission details. You have to send this acknowledgment slip within 15 days of your online submission to the NSDL office in Pune. If you are not making an online payment when applying, you also have to send the NSDL a Demand Draft or cheque for Rs. 63.
- How will my TAN number be sent to me?
The NSDL will send the TAN allotment letter to the address provided by you in the Form 49B.
- Can I track the status of my TAN?
Yes, you can. The NSDL-TIN website has a ‘Status Track’ section. You need to know your 14-digit acknowledgement number to check the status. You can check your status after 3 days of applying for TAN.
- Can I leave the TAN section blank on TDS/TCS/Annual Information Return slips if I have not received the TAN yet?
No, you cannot deduct or collect taxes if you have not obtained the TAN yet. If you do not quote your TAN where required, the documents will be returned and the request will not be processed.
- If my company has several branches, do I need to get a separate TAN for all of them?
Yes. You need to apply for TANs for all branches if the person/authority who collects TDS/TCS is different. Details such as name of the branch, its location, designation of the person responsible for TDS/TCS, etc. should be mentioned in the forms when applying for TAN.
- What do I do if my TAN is in the old format?
You can cross-check your TAN number either with the TIN-FCs, who will help you get the new number, or in the online database. If checking online, you can enter your old TAN and the system will give you the new one.
- Under what conditions can my TAN be rejected?
Your TAN may be rejected for the following 3 reasons:
- You have not filled the Form 49B correctly, or the form is incomplete.
- You already have a TAN in your/your company’s name.
- Your payment was not properly processed.
- What should I do if my TAN is rejected?
Fill in the Form 49B correctly and completely before submitting it to NSDL. If you are not sure, go to your nearest TIN facilitation centre and take the help of the officials there. Make sure that your payment has gone through – if you are sending a cheque, ensure that you have sufficient funds in your bank account. Whatever mistakes you made in the previous form, avoid making them.