As per Income tax act every person who is liable to deduct or collect tax should obtain tax deduction and collection account number generally called as TAN [Section 203A]. TAN is a ten digit alphanumeric number allotted by the department. The structure of TAN is ABCD 12345 E. A deductor or collector may obtain TAN by filing an application in Form 49B. An application form for obtaining TAN can be filed either online or through offline mode before the TIN - Facilitation centers managed by NSDL. Any errors in the TAN allotted can be corrected through filing an application in the correction form submitted before the TIN - Facilitation center managed by NSDL. Once the TAN is allotted Quote the TAN in all TDS / TCS related documents [Section 203A].
- TDS and TCS Statement or Return
- Challans for payment of TDS or TCS
- Statement of financial transactions
- TDS and TCS Certificates
- All other documents as may be prescribed.
The assessing officer can impose a penalty, if any person fails to obtain TAN, by passing an order to the extent of Rs 10000/-. The assessing officer can impose a penalty, if any person fails to Quote TAN or Quoted incorrect TAN in the TDS related documents, by passing an order to the extent of Rs 10000/-. However obtain TAN is not required for deduction against payment specified in section 194IA, 194IB & 194M. TAN allotted for TDS can be used for the purpose of TCS also. It is illegal to obtain more than one TAN. However, organizations with branches or divisions may have separate TAN for each branch or division. The assessee should immediately surrender the TAN for cancellation, if more than one TAN is allotted inadvertently.