The Tax Account Number (TAN) is a 10-digit alphanumeric code that is assigned to individuals or businesses that are required to deduct tax at the source of income. The TAN is issued by the Income Tax Department of India, and it is mandatory for anyone who is required to deduct tax at the source to obtain a TAN.
Meaning and Definition: The Tax Account Number (TAN) is a unique 10-digit alphanumeric code that is issued by the Income Tax Department of India. The TAN is used for the purpose of deducting tax at the source of income, and it is mandatory for businesses and individuals who are required to deduct tax at the source to obtain a TAN.
Features: The TAN is a unique code that is used for the purpose of deducting tax at the source of income. The TAN is used to identify the entity that is responsible for deducting the tax at the source. The TAN is also used to track the amount of tax that has been deducted at the source and to ensure that the tax is deposited with the Income Tax Department of India.
Types: The TAN is issued to businesses and individuals who are required to deduct tax at the source of income. The TAN is used for various types of taxes, including income tax, TDS on salaries, TDS on interest, and TDS on rent.
Costs: The cost of obtaining a TAN is nominal, and it varies depending on the service provider. The TAN can be obtained through various service providers, including NSDL and UTIITSL.
Time Involved: The time involved in obtaining a TAN varies depending on the service provider. Generally, the TAN can be obtained within a few days of submitting the application.
Advantages: The TAN is an essential requirement for businesses and individuals who are required to deduct tax at the source of income. The TAN helps in identifying the entity that is responsible for deducting the tax at the source, and it helps in tracking the amount of tax that has been deducted at the source. The TAN also helps in ensuring that the tax is deposited with the Income Tax Department of India.
Disadvantages: There are no significant disadvantages of obtaining a TAN. However, failure to obtain a TAN can result in penalties and legal consequences.
Documents Required: The following documents are required for obtaining a TAN:
- PAN card of the applicant
- Address proof of the applicant
- Identity proof of the applicant
- Business registration certificate (in the case of a business entity)
- Proof of office address (in the case of a business entity)
- Any other relevant documents as specified by the service provider.
TAN is required by all individuals because without it Tax Deducted at Source (TDS) or Tax Collected at Source (TCS) returns are not accepted by TIN facilitation centres. Banks to do not accept the challans for TDS/TCS payments if TAN is not quoted.
It needs to be mentioned that failing to apply for TAN or not quoting the 10-digit alphanumeric number in specified documents like TDS/TCS returns, e-TDS/e-TCS returns, TDS/TCS certificates, and TDS/TCS payment challans can attract a penalty of Rs.10,000.
Taxpayer Identification Number (TIN)
The Taxpayer Identification Number (TIN), similar to TAN, is a unique eleven-character identification number that is given to Indian enterprises and organizations for which Value Added Tax (VAT) is applicable, such as e-commerce stores and product or service manufacturers. Quoting of TIN has been made mandatory for business enterprises while filing taxes, and is applied for sale transactions that happen within a state, and those that happen between two or more states.
The Taxpayer Identification Number (TIN) also makes it easier for entities to have all the VAT transactions in one centralized place. This also enables entities to see the amount of VAT collected, paid or to be paid in the future.
Differences Between TAN And TIN
Both TAN and TIN are tax identification numbers. However, while the Taxpayer Identification Number (TIN) is beneficial for both the state and the entity, the Tax Deduction and Collection Account Number (TAN) is assigned to companies and financial institutions. TAN helps in keeping track of the collection and deduction of taxes that take place at the source. Apart from that, here are some of the key differences between TAN and TIN.
- Allocation Agency: The Income Tax Department of India allocates the Tax Deduction and Collection Account Number (TAN), while the Commercial Tax Department of the applicant’s state allocates the Taxpayer Identification Number (TIN).
- Number composition: TAN is a ten digit alpha-numeric number, which is assigned to entities that are responsible for collecting and deducting taxes. TIN, on the other hand, is an eleven digit registration number assigned to business enterprises and companies, for whom VAT is applicable.
- Purpose: TAN’s purpose is to streamline collection and deduction at the source. Meanwhile, TIN is used to track VAT-related activities in India.
- Forms to be filled while applying: Individuals applying for TAN must fill Form 49B, while different states have different forms for entities applying for TIN.
- Documents to be submitted: While applying for TAN, individuals needn’t submit additional documents with the application form. However, while applying online, one has to submit a signed acknowledgment generated to the NSDL. For TIN however, the documents required include identity and address proof, along with other documents which vary from state-to-state.
TAN Application Procedure (Online)
- An applicant for TAN needs to be filled in Form 49B online.
- In case there’s an error, it needs to be rectified and the form needs to be re-submitted.
- A confirmation screen with data filled which is provided by the applicant would be displayed.
- The applicant can edit or confirm the same.
1. Once the confirmation is provided by the applicant, an acknowledgement screen would be displayed.
This acknowledgement would consist of:
a. A unique acknowledgement number of 14-digits
b. Name and contact details of the applicant
c. Status of applicant
d. Details with respect to payment
e. Space for signature
2. Applicants should save and print this acknowledgement.
3. The applicant must sign in the space so provided
The signed acknowledgement along with DD (if any), shall be sent to NSDL (National Securities Depository Limited) 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.
The fee for processing the application for TAN application INR 65.00 ( 55.00 application charge + 18.00% Goods & Services Tax) and this is a non-refundable fee if your application is rejected. Demand draft/Cheque shall be drawn in favour of NSDL-TIN.
Once this form submitted, the department would verify details so submitted. If the application appears to be correct, NSDL would send TAN details to the applicant’s address as provided in the form 49B or they could also send an email with the TAN details if the application was made online.
For applying offline, the process is the same as mentioned above apart from the fact that the applicant is required to visit the TIN facilitation centres located in their place of residence.
Filling Form 49B
Below are few points which one should bear in mind while applying for TAN in form 49B.
- Form 49B should be filled in English only and in capital letters.
- The details of the assessing officer are required to be furnished by collector or deductor of tax. This information could be accessed from Income Tax Office if the same isn’t available
- Details with respect to the district, area, area code, etc. are required to be provided by tax deductor or collector. If such detail isn’t known, Income Tax Office would assist you to find out the same.
- The form must be filled up entirely. Blanks or pending sections won’t be considered
- Individuals responsible for filing and submitting tax must list down their designation mandatorily
- The applicant’s address must be an Indian address
Ques:-While paying through demand draft or cheque, whom should I address it to?
Demand Draft and cheques should be in favour of NSDL-TIN.
Ques:-Should I apply for a new TAN if I change my address?
If the relocation is within the same city then it is not required. However, if the relocation is happening between different cities then you are required to surrender the existing TAN and apply for a fresh TAN.
Ques:-In case, I lose my TAN allotment number, how can I prove of having TAN?
A printout from the website of the Income Tax Department of the webpage showing the details of TAN can be helpful in proving that you can TAN.
Conclusion: The Tax Account Number (TAN) is a 10-digit alphanumeric code that is assigned to individuals or businesses that are required to deduct tax at the source of income. The TAN is issued by the Income Tax Department of India, and it is mandatory for anyone who is required to deduct tax at the source to obtain a TAN. The TAN helps in identifying the entity that is responsible for deducting the tax at the source, and it helps in tracking the amount of tax that has been deducted at the source. Obtaining a TAN is a simple and straightforward process, and it is essential for businesses and individuals who are required to deduct tax at the source of income.