TAN Registration

Tax Deduction Account Number or Tax Collection Account Number is a 10-digit alphanumeric number issued by the Income-tax Department (we will refer to it as TAN). TAN is to be obtained by all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS).

As discussed above, every person liable to deduct tax at source or collect tax at source is required to obtain TAN. However, a person required to deduct tax under section 194-IA can use PAN in place of TAN as such person is not required to obtain TAN.

Consequences of not quoting TAN

TAN Section 272BB(1) provides for penalty for failure to obtain TAN and section 272BB(1A) provides for penalty for quoting incorrect TAN. Penalty imposable under section 272BB is Rs. 10,000.

Reason to obtain TAN

• Tax deduction Number: PAN is a 10 character alpha-numeric code issued by the Income Tax Department for persons responsible for deducting or collecting tax at source. All most all for-profit entities and not-for-profit entities are required to obtain TAN.
• TDS payments: Tax Deducted at Source must be paid into authorized bank, quoting the TAN and using Challan 281. TDS during the preceding month must be paid before the 7th day of the following month.
• Proprietorship required TAN: Salaried individuals are not required to deduct tax at source. However, individuals running a proprietorship are required to obtain TAN and deduct tax at source when required.
• Validity: Once a TAN is issued, it is valid for lifetime. However, TDS Filings must be made quarterly on the 15th day of July, October, January and May. Non-filing of TDS filings within the due date will attract a penalty.

Proedure: