TAN Full Form

TAN full form is Tax Deduction and Collection Account number, which is granted to a company, individual or sole proprietor for paying and deducting tax on cash payments as enforced by the Income Tax Department. It is mandatory to include TAN number in all TDS returns or challans at the time of paying tax. As per income tax department rules, taxpayers have to mandatorily provide the TAN number when filing taxes.

What is TAN Full Form?

TAN stands for tax deduction and collection account number and is a 10-digit alphanumeric number which is required to be provided by a person or company while paying taxes. Eerie assessees who are eligible to deduct TDS should apply for a TAN number and mention it every time they make TDS returns or payments. 

According to section 203A under the Income Tax Act 1961, an assessee should quote the TAN number in various interactions they undertook with the Income Tax Department, and in case of failure, assessee have to pay a penalty of Rs 10,000. If you haven’t applied for your TAN number, then read our article to gather adequate information on the benefits, uses and processes of TAN. 

Overview of TAN

Understanding the Structure of the TAN Number

Over the years, Tax Deduction and Collection Account Numbers (TAN full-form) have undergone several changes in terms of structure. Earlier, it was represented as a 10-digit unique number however it got revised as four latest at the beginning followed by five numerals finally ending in an alphabet.

Each letter and numeral represents a unique detail that is mentioned below:

• A TAN number holder’s jurisdiction code is placed at the start of the number with the first three alphabets.
• The fourth letter in the TAN number contains the initial alphabet of a person’s name, for a company similar method is followed. 
• The next 5 numbers carry no such relevance as the previous number or alphabet.
• The last alphabet is regarded as the unique identifying entity.

Who can Apply for TAN?

As per the rules and guidelines, anyone who is paying salary or a commission to another, then that person/entity must have a valid TAN. The list of entity can include:

• Individuals
• Hindu Undivided Family
• Company
• Central/State government
• Local Authority
• Sole Proprietor
• Firms
• Associations of a person
• Trusts
• Charitable Organization

Steps in TAN Application

As mentioned above, any individual can apply and fill the application form to apply for TAN. The person can apply for TAN in an online mode through the website of NSDL TIN. The online application procedure for TAN (which is form 49B) are:

• Fill the form 49B and submit the form
• Check and detect any errors. In case of any discrepancy, rectify the errors and re-submit the form
• A confirmation screen will appear which will showcase the data filled by the applicant
• The applicant can either edit or confirm the declaration after checking

Payment for TAN

The fee charged for processing the TAN Application form is INR 65. The fee payment can be done through demand draft or cheque using cards such as debit/credit cards or by choosing the option of net banking. Supposedly, if the candidate chooses the demand draft or cheque mode, then he or she will have to write with regard to ‘NDSL-TIN’. Whereas, the name of the applicant and the acknowledgment number have to be mentioned on the reverse side.

However, there are certain limitations with respect to the payment for TAN. The facility to make payment by credit card, debit card, or net banking is not present for the Central Government, State Government, and statutory or autonomous bodies. The Branch/Company/ Division/Director of the company can make payment for TAN. In the case of sole proprietorship, the branch of the individual business or a single individual can carry out the payment process. In a matter of charitable organizations or trusts, the signatory must fall under section 140 of the Income Tax Act, 1961.

What is the Process to Apply for TAN?

As mentioned above TAN full form is Tax Deduction and Collection Account Number and is a necessary detail one needs to use while filing for TDS returns. Applying for a TAN number is pretty simple and can be carried out both offline as well as online mode. When applying for the process, you need to pay an amount of Rs 62 through net banking or card payments. To begin with a TAN application, one needs to choose form no. 49B at the website tin.tin.nsdl.com/tan/form49B.html.

The form will contain the following particulars, before you finally submit it is necessary to check it properly.

1. Applicant’s name
2. 14-digit acknowledgement number
3. Payment details
4. Contact details
5. Application status
6. Signature space

If you are not comfortable filling out the form online mode, you can get the application form from the TIN-FC centers, on submitting the form applicant will get an acknowledgement number. Applicants are advised to take a hard copy of the acknowledgement page until they receive their TAN number.

Why is Holding a TAN Number Considered Crucial?

Paying taxes to the government falls as an important part of a citizen’s duty, similarly getting a TAN number turns equally crucial when paying taxes. The Income tax department has set certain norms and regulations to ensure people or companies file their TDS returns or deductions well on time. Here are some of the reasons which will help you understand the significance of getting a tax dedication and collection account number.

• While seeking challans for your TDS or TCS payments, you need to provide the TAN number otherwise, you will be prohibited to procure the document.
• If an individual or a company fails to get their tax deduction and collection account number, then the income tax department won’t allow them to file for TCS or TDS returns.
• A TAN number is necessary when submitting the TDS documents or certifications, failure can result in issues in future.

How to Check the TAN Application Status?

To apply for a TAN number, one needs to either visit the office of TIN-FC or else, browse the official site of NSDL to fill out the form. Well, once you complete the submission process, next, you will wait with our acknowledged number. Follow the below-mentioned steps to learn about your application status for TAN.

1. Browse the official portal
2. Select the option on TAN
3. Go to the option on ‘know status of the application’
4. Choose applicant type
5. Enter the acknowledgement number
6. Enter Captcha
7. Click on submit

Learning the Differences Between TAN and PAN

Both TAN and PAN are issued by the Income-tax Department; however some slight differences can be found in the two identity numbers, let’s check them out.

Hopefully, you have got a fair idea on the tax deduction and collection account number. Every individual or company that pays tax at source needs to procure a TAN number otherwise paying TDS will get hampered. So, get your TAN number today by visiting the official site of NSDL.