What Is a Tax Deduction and Collection Account Number and How to Apply for It?

The Tax collection and deduction Account Number or TAN number is a 10-digit alphanumeric code issued by the Income Tax Department.

TAN is issued to individuals or authorities involved in collecting or deducting tax at source (TCS and TDS). The first 3 letters display the jurisdiction where TAN is issued, the 4th alphabet is your initial letter, and the remaining 6 are system generated.   

Importance of TAN Number

As per Section 203A under the Income Tax Act of 1961, it is compulsory to quote TAN number full form of (Tax Collection or Deductions Account Number) in the documents like –

• TDS and TCS statements
• Challan for TCC or TDS 
• TDS and TCS certificates 
• Any statements for financial transactions 

If an individual or entity fails to obtain the TAN number or furnishes wrong TAN details on these documents, they will be liable to pay a penalty.     

If you fail to obtain TAN or furnish inaccurate TAN details on the mandatory documents – you will be penalised as per Section 272BB under the Income Tax Act of 1961. Besides, just like your PAN number, your TAN is an essential document when you prepare your firm for a business loan.         

Can you apply for TAN?

You can apply for TAN if you qualify under the following categories:

• Company or LLP
• Sole proprietor 
• Trusts 
• Central and State Government authorities
• Association  

Now that you are aware of what is TAN, meaning and importance – take a look at its application procedure.   

How to apply for TAN?

There are 2 modes of the application procedure to know your TAN number – online and offline modes. 

A] Online procedure 

Online application for TAN can be processed through the official website of NSDL TIN. The procedure is as follow:

Step 1: Fill Form 49B accurately and complete the verification process. 

Step 2: Check for any discrepancies and click on ‘Final Submit’. 

Step 3: You will be redirected to a confirmation screen – displaying all the data entered by the applicant. 

Step 4: Make the payment for processing your TAN application. You can make the payment either through net banking or via a demand draft. 

If you choose cheque or demand draft mode to pay for TAN number registration, send it in favour of NSDL – TIN. 

B] Offline procedure 

If you wish to apply for TAN allotment through offline mode, you have to fill up the application and submit the Form No. 49B at any TIN facilitation centre. Applicants can also collect the application forms from such facilitation centres. You can download the same form from the NDSL – TIN website. 

Why is TAN crucial for employers? 

TAN processing is compulsory for businesses and individuals providing salary and commission to any entity. The importance of TAN further comes into the picture when you need to submit TCS and TDS certificates for procuring a Business Loan from lenders like Bajaj Finserv.     

If enterprises require funds to boost their working capital or expand business operations – you will have to furnish IT return files as part of the list of documents required for a business loan.

Plus, such documents come in handy while availing pre-approved offers from the lender mentioned above.

These pre-approved offers are provided to existing customers – streamlining their loan application procedure and minimising documentation.

Do you require separate TANs for TDS and TCS?

You only need a single TAN for performing both tax collections and deductions. Besides, it is illegal to hold more than one TAN. However, a business or individual is allowed to acquire multiple TANs from different divisions.  

In case you have lost your TAN, the IT department will issue a ‘know your TAN’ – to find your TAN online or filing a petition with the requisite details.