he Tax Deduction and Collection Account Number (TAN) is a 10-character alphanumeric identifier issued by the Income Tax Department of India to entities that are required to deduct or collect tax at the source. Here’s some information about TAN:
1. Purpose:
- TAN is primarily used for tracking tax deductions made by entities while making certain payments, such as salaries, interest, dividends, or payments to contractors, which are subject to Tax Deducted at Source (TDS).
- It is also used for tracking tax collected at source (TCS) on specified transactions.
2. Entities Requiring TAN:
- Entities such as companies, firms, individuals, and government agencies are required to obtain TAN if they are responsible for deducting or collecting tax at the source as per the provisions of the Income Tax Act, 1961.
3. Application Process:
- Entities can apply for a TAN by submitting Form 49B online through the NSDL (National Securities Depository Limited) or UTIITSL (UTI Infrastructure Technology and Services Limited) portals.
- The application can also be submitted offline by filling out Form 49B and submitting it to authorized TIN facilitation centers along with the required documents and prescribed fee.
4. Importance in Tax Compliance:
- TAN plays a crucial role in tax compliance as it enables entities to deduct or collect tax at the source as required by law.
- Entities must quote their TAN in all TDS/TCS returns, challans, and certificates issued to deductees/collectees.
5. Responsibilities of TAN Holders:
- TAN holders are responsible for deducting tax at the applicable rates, depositing it to the government’s account within the specified due dates, and filing TDS/TCS returns accurately and on time.
- Failure to comply with TDS/TCS provisions may attract penalties and legal consequences.
6. Verification of TAN:
- TAN details can be verified online through the Income Tax Department’s website using the TAN verification service.
- This service allows users to verify the authenticity of TAN details provided by entities for various transactions.
7. Renewal and Changes:
- TAN does not require renewal and remains valid for a lifetime unless surrendered or canceled.
- In case of any changes in TAN details such as address, name, or contact information, the entity must update the information with the tax authorities.
Obtaining and maintaining a TAN is essential for entities involved in deducting or collecting tax at the source as it ensures compliance with tax laws and facilitates smooth tax administration.