TAN | Tax Deduction and Collection Account Number

29 Aug 2018 Read 358 Views

TAN is a 10 digit alphanumeric number. Its abbreviation is Tax Deduction and Collection Account Number. This number enables the responsible person for deducting tax at source or collecting tax at source. This is number is issued by the Income Tax Department.  All most all not for profit organisations and profit organisations need to pay TAN. Failure to pay Tan may lead to fine up to Rupees 10,000 according to Section 272 BB of Income Tax Act. Individuals who are salaried do not have to pay TAN.

Components of TAN

In a TAN number the 1st four characters are the alphabets. The next 5 characters are numbers followed by the last character which is an alphabet. 

Illustration: My name is Yash and I start a business then my TAN number will be XCGT Y 2123 L.

Features of TAN Number

  • TAN number is valid for lifetime.
  • Individuals who are running a proprietorship are required to obtain TAN number.
  • It consolidates TDS/TCS file for doing correction in return.
  • TAN number can be obtained by 2 ways either within one month from the end of month from which TDS is deducted or before TDS is deducted.
  • TAN number should be told when TDS is being deposited in an authorized bank. The Challan 281 also needs to be used.

Advantages of TAN number

  • It is used for deducting interest, salary, dividends, interests etc.
  • TAN number is also used to capture Postal Index Number which is recorded with the Income Tax Department.
  • TAN number is also used for certificates, returns and challans.
  • The complete address of the person who deducts the tax on behalf of the Income Tax Department is auto captured.
  • A collector can apply for TAN for every branch or division in case he has many branches or divisions.
  • Retrieval of eTDS statements filed earlier.
  • All services such as Challan Status Enquiry, eTDS online filling etc. are in one window.
  • The deductor can see the status of all statements filed. 

Eligibility for tan registration

As per the Income Tax Act, a person who is one of the following is eligible for TAN.

  • Individual (Sole Proprietorship)/Branch of individual business
  • Firm / Branch of firm
  • Company/Branch/Division of a company
  • Association of Persons/Body of Individuals/Association of Persons (Trusts)/Artificial Juridical Person
  • Hindu Undivided Family (HUF)
About the Author: Chandni Agrawal | 89 Posts

Chandni holds a degree in business administration and possess flair for content. She also holds a certificate in investment banking and has a working experience of around 1.6 years in the industry. She is a smart professional who facilitates seamless coordination during hectic work schedule. 

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