A TAN Number (Tax Deduction and Collection Account Number) is a 10-digit alphanumeric identity allotted by the Income Tax Department to individuals or businesses who are responsible for deducting or collecting tax at source (TDS/TCS). Unlike a PAN which is for the taxpayer, the TAN is for the tax deductor.
When you ask “what is TAN Number,” you are referring to the registration required to legally deduct tax from someone’s payment (like salary, rent, or commission) and deposit it with the government.
What Does TAN Number Mean?
It acts as the account number for your TDS filings.
Structure: 4 Letters + 5 Numerics + 1 Letter.
Example: MUMT12345A
– MUM: City Code (Mumbai)
– T: First letter of Deductor’s Name
– 12345: Serial Number
– A: Check digit
Why TAN Number is Important
- Mandatory for TDS: You cannot file TDS Returns (Form 24Q/26Q) without a valid TAN.
- Generating Form 16: To issue Form 16 (Salary Certificate) to employees, the employer’s TAN must be mentioned.
- Payment Challans: When depositing tax to the bank, the Challan Identification Number is generated against a specific TAN.
Where is TAN Number Used?
- TDS Certificates: Form 16 and Form 16A.
- Annual Information Statement (AIS): Your AIS shows TDS deducted by others, identified by their TAN.
- Property Sale: However, for buying property over ₹50 Lakhs (Section 194IA), you do not need a TAN; you can use your PAN.
How to Find or Check TAN Number
To Apply:
Fill Form 49B online on the NSDL (Protean) website.
To Search a TAN:
1. Visit the Income Tax E-Filing Portal.
2. Click “Know Your TAN”.
3. Select Category (Company/Individual) and State.
4. Enter Name or Mobile Number.
5. The system lists the TAN details.
Example of TAN Number
DELC09876F (Delhi Company)
Common Problems or Errors
- Quoting PAN instead of TAN: If a deductor quotes PAN in TDS documents, they face a penalty of ₹10,000.
- Multiple TANs: A company should ideally have different TANs for different branches/circles if they file separately, but having multiple TANs for the same branch is an error and should be surrendered.
Important Things to Remember
- If you run a business and pay salary/rent/commission above limits, get a TAN immediately.
- For tax credits, check your Form 26AS which lists the TAN of everyone who paid tax on your behalf.
- Understand what is AO Code in PAN for PAN specific details.
Frequently Asked Questions
Is TAN number same as PAN number?
No. PAN is for the Tax Payer (Payee). TAN is for the Tax Deductor (Payer). However, in specific cases like selling property (Form 26QB), PAN can be used as TAN.
What is the penalty for not having a TAN?
Failure to apply for TAN attracts a penalty of ₹10,000 under Section 272BB of the Income Tax Act.
Can a salaried individual have a TAN?
Usually, no. But if a salaried individual pays rent above ₹50,000/month, they need to deduct TDS. However, for this specific section (194IB), TAN is not required; PAN suffices.
How do I surrender a duplicate TAN?
You can file a “Change/Correction” form on the NSDL website and mark the specific TAN for cancellation/surrender.
Do I need TAN for GST?
No, GST works on PAN. TAN is exclusively for Income Tax TDS/TCS compliance.