WHAT IS TAN?
The Income-tax Department issues Tax Deduction Account Number or Tax Collection Account Number. Every person is liable to deduct tax at source or collect tax at source is required to obtain TAN.
TAN stands for Tax Deduction and Collection Account Number. It is a unique 10 digit alpha numeric number allotted by the Income Tax Department (ITD) of India. TAN number to be obtained by all persons who are responsible for deducting or collecting the tax. It is compulsory to quote TAN in TDS / TCS return. (including any e-TDS / TCS return), any TDS / TCS payment challan and TDS/TCS certificates
TAN number?
TAN number consists of 10 digits, starting from four alphabets followed by five numbers ended with one alphabet. An example of TAN number is RXOY 02811 K
Who needs to apply for TAN?
People who are required to deduct tax at source or collect tax at source on behalf of Income Tax Department are required to apply for a TAN and obtain it.
Law requirement?
The provisions of section 203A of the Income-tax Act require all persons who deduct or collect tax at source to apply for the allotment of a TAN. This section also makes it mandatory for TAN to be quoted in all TDS/TCS returns, all TDS/TCS payment challans and all TDS/TCS certificates to be issued. Failure to apply for TAN or comply with any of the other provisions of the section attracts a penalty of Rs. 10,000.