TAN number is one of the most important requisites for businesses. In India, all companies and individuals deducting or collecting taxes at the source need to have a TAN number to run their day-to-day operations hassle-free and avoid penalties. 

In this blog, we’ll walk you through everything you need to know about TAN. 

What is TAN?

The Tax Deduction Account Number or Tax Collection Account Number, also known as TAN is a 10-digit alpha-numeric number that is issued by the Income Tax Department. TAN number starts with 4 alphabets and 5 numerals, followed by 1 alphabet.

Section 203A of the Income Tax Act 1961 mandates all businesses collecting tax at source (TCS) or deducting tax at source (TDS) have a TAN number. It’s important to quote TAN in TDS returns, TDS payments, TDS challans and certificates to avoid penalties.

Importance of TAN for businesses

TAN number serves as a crucial identification number for businesses for filing tax returns. 

All businesses are mandated by the Government of India to register for a TAN number, irrespective of their size. 

The importance of TAN resonates with the fact that all businesses are required to deduct tax at source (TDS) for their supplier, vendor, salary or contractor payments higher than a certain threshold. 

There are different limits for different nature of payments. For example, rent higher than Rs 1,80,000 or a professional’s fee over Rs 30,000 needs a TDS deduction. In all these cases, the businesses taking these services will have to deduct tax at source, declaration of which requires a TAN number to do so.

[Also Read: TDS Rate Chart: FY 2021-22]

How to apply for TAN

TIN-NSDL and TIN Facilitation Centres allot TAN to applicants on behalf of the Income Tax Department.

Note: No other entity except the Income Tax Department is allowed to issue TAN to individuals or businesses in India. 

Online TAN Application

You can follow the following steps if applying for TAN online: 

  1. Visit the NSDL-TIN website (https://tin.tin.nsdl.com/tan/index.html)
  2. Select the ‘online application for TAN (Form 49B) on the website
  3. In the ‘Apply for new TAN’ option, select the category of deductors and click on ‘Select’ 
  4. Carefully fill Form 49 B, avoiding any errors, and click on ‘Submit’. 
  5. Now, pay the fees online, or make a DD, cheque, payable at par in Mumbai, favouring NSDL-TIN or by credit/ debit card
  6. You can track the status of your application with a 14-digit acknowledgement number
  7. Next, print this document, sign it, and then send it to NSDL office at:
    NSDL e-Governance Infrastructure Limited,
    5th floor, Mantri Sterling,
    Plot No. 341, Survey No. 997/8,
    Model Colony,
    Near Deep Bungalow Chowk,
    Pune – 411016

Offline TAN Application

You can also apply for TAN offline following these steps:

  1. Visit their nearest TIN Facilitation Centre and avail Form 98. You can also download this from the Income Tax website for free
  2. If your company is not registered under the Companies Act, a Form INC-7 has to be filled additionally.
  3. Fill the form and submit it at the TIN counter along with a processing fee of Rs 63 via demand draft, cheque, or cash.
  4. You can track the status of your TAN application with the NSDL by calling the TAN call center at 020-27218080 or send an SMS ‘NSDLTAN’ to 57575.

Penalties for TAN defaulters

If a company fails to quote Tax Deduction and Collection Account Number on documents where TAN is mandatory, they will be levied a penalty of Rs 10,000.

If a company provides incorrect TAN, they will be penalized Rs 10,000 under Section 272BB of the Income Tax Act.

Frequently Asked Questions (FAQs)

How can I get a TAN number for my business?

The Income Tax Department will provide TAN to applicants who can choose to apply via offline or online modes. Applicants can either apply for TAN on the NSDL-TIN website or visit their nearest TIN Facilitation Centre.

Will I be charged to get a TAN number?

Yes, processing fees of Rs 63 will have to be paid by the applicant to get a TAN offline, and Rs 55 + service charges for online mode.

Do I need different TAN numbers for TDS and TCS?

Do I need different TAN numbers for TDS and TCS? No, a single TAN is used for both TDS and TCS purposes.

Is it okay if my company has a PAN but not a TAN?

No, businesses need a TAN number regardless of a PAN number. PAN cannot be used by deductors or collectors for TDS and TCS purposes.

What documents should I submit with Form 98 when applying for a TAN?

You do not need to submit any extra documents if you are applying offline. If you are applying online, you will have to print and sign the acknowledgement slip after filling the form and send it to the NSDL office.

How can I check the status of my TAN application?

The NSDL-TIN website has a ‘track status’ section where you can check the status of your application 3 days after application. You can also send an SMS NSDLTAN to 57575 for the same.

My TAN application has been rejected. What should I do?

It is likely that you made a mistake filling the form or during payment. Go to your nearest TIN Facilitation Centre and take the help of the officials to ensure you are making no mistakes.

Do I need a separate TAN for different branches of my company?

Yes, you would need to apply for different TAN for different branches of your company.

How will I receive my TAN number?

You will get a TAN allotment number on the address mentioned by you in Form 98.

We hope this helped you understand the importance of TAN number for your businesses. Subscribe to our weekly newsletter to stay updated about all the recent tax changes & their effect on your business.

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A potterhead finding magic in words | Content Marketer @ RazorpayX

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