What is TAN?

A Tax Deduction and Collection Account Number (TAN) is a unique 10-digit alphanumeric number issued by the Income Tax Department of India. It is required by all individuals and entities who deduct or collect tax at source under the Income Tax Act, 1961.

Why is TAN Important?

• TAN is used while depositing Tax Deducted at Source (TDS) or Tax Collected at Source (TCS).

• It ensures that the person receiving payment can claim the deducted tax in their income tax return.

• Without a valid TAN, TDS/TCS returns or challans are not accepted.

• Failure to obtain or quote TAN can attract a penalty of ₹10,000.

How to Apply for TAN?

• TAN is applied through Form 49B.

• The form can be submitted online via NSDL’s website or offline at a TIN-FC (Tax Information Network Facilitation Center).

• No additional documents are required at the time of application.

• For online applications, an acknowledgment slip and supporting identity/address proof must be sent to NSDL by post or courier.

• Once verified, NSDL issues the TAN on behalf of the Income Tax Department.

Structure of TAN

A TAN looks like this: RAJA99999B

• First 3 letters → represent the city/state where TAN is issued.

• 4th letter → first letter of the deductor’s name (individual/company/firm, etc.).

• Next 5 → numeric digits.

• Last → alphabet.

Who Needs to Apply for TAN?

Any person or organization making payments where tax must be deducted needs a TAN, such as:

• Individuals

• Hindu Undivided Families (HUFs)

• Companies and Firms

• Central or State Government offices

• Sole Proprietors

• Associations of Persons

• Trusts

✨ In short, TAN is mandatory for anyone deducting or collecting tax in India. It helps track TDS/TCS transactions and ensures smooth filing of income tax returns.

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