Full Form of TAN:
Tax Deduction and Collection Account Number
TAN Full Form is Tax Deduction and Collection Account Number. TAN is a ten-digit alphanumeric number that is issued to people who are, under law, required to collect or deduct tax on those payments that are made by them as per the Income Tax Act 1961. It is also issued to those people who are required to do the collection of Tax at Source (abbreviated as TAS). In a typical TAN, the first four digits are alphabets, followed by five digits that are numeric in nature, then followed by the last digit that is an alphabet.
In this, the first three digits indicate the jurisdiction code, the fourth alphabet indicates the initial of TAN holder’s name, who can also be a firm, company, individual, etc. Although TAN is required for the purposes of deduction of taxes, however, as per section 194-IA, one can make use of PAN instead of TAN.
Apart from the aforementioned provision, there is section 272BB (1) that provides for the penalty in case there is a failure to secure a TAN and similarly, there is section 272 BB (1A) that provides that using an incorrect TAN would attract penalty. It is also illegal that a deductor possesses more than one TAN and possession of multiple TAN would attract penalty under the provisions of the Income Tax Act 1961. Now that we have basic understanding of TAN, let us look into some other important facets of TAN:
Procedure for filing an online application for TAN
The person, who can be referred to as deductor, can make an application online at the website of NSDL-TIN, which is https://tin.tin.nsdl.com/tan/index.html
- When the deductor has correctly filled the application, there is a receipt of an acknowledgment that comprises a 14 digit acknowledgment number; the status of the deductor; the name of the deductor; contact details of the deductor; payment details of the deductor; and a signature space.
- The applicant must ensure that he has saved the receipt of acknowledgment and has obtained a printout of the same.
- The applicant must sign the acknowledgment and that sign must be done within the confines of the signature box provided.
- In case the applicant is not an individual, stamp or seal to be affixed.
- If a thumb impression is made, the same must be attested by Notary Public or Magistrate or Gazette Officer.
- Payment can be done by demand draft, or cheque, or e-payment. In case of a cheque or a demand draft, the payment is to be made in favor of the NSDL-TIN.
PAN and TAN
It is to be noted that one must never use a PAN in the field which requires quoting of TAN. If the deductor does not have TAN, then he should make an application for the same. There is, however, an exception because, under the provisions of Section 194-IA, one can make use of PAN instead of TAN but that is only an exceptional case.