TAN is the abbreviated form of Tax Deduction and Collection Account Number. It is actually a unique ten digit alpha-numeric (comprising both alphabets and numerals) number, allotted by the Income Tax Department of India. A TAN is mandatory for every individual who is entrusted with the responsibility of deducting or collecting tax at source, on behalf of the Income Tax Department of India. Moreover, according to the provisions of Section 203 A of the Income Tax Act, it is obligatory to quote the TAN in all TDS (Tax Deducted at Source) and TCS (Tax Collected at Source) return (including e – TDS/ TCS return).
TAN should also be mentioned on the TDS/ TCS payment challan and all the TDS/ TCS certificates to be issued. In case, TAN is not quoted in TDS/TCS returns, they won’t be approved. Moreover, failure to quote the TAN on challans for TDS/TCS payments makes them unacceptable in banks. In order to apply for a TAN card or to make any alterations in an existing TAN record, one must submit the requisite application form (Form 49B), which is available at any of the Tax Information Network Facilitation Centers (TIN-FCs) that are managed by the National Securities Depository Ltd (NSDL).
There are also provisions for online application of form. The applicants have to pay only Rs. 50 and an additional service tax (as applicable) as processing fee at the TIN-FC’s, when submitting Form 49B. Care should be taken that the form does not remain incomplete form, as they will be considered invalid and rejected. In case of failure to apply for TAN (individuals who require TAN) or not quoting the same in the specified documents and accounts, the individual will be required to pay a penalty of Rs. 10,000.