TAN Registration: Step-by-Step Guide for TDS & TCS Compliance – By CA Sandeep Rawat
Meaning and Importance of TAN (Tax Deduction Account Number)
Author: CA Sandeep Rawat | Email: sandeeprawatca@gmail.com | Contact: 9315776867
What is TAN?
TAN stands for Tax Deduction Account Number or Tax Collection Account Number. It is a 10-digit alphanumeric code issued by the Income Tax Department of India to all persons responsible for deducting or collecting tax at source under the Income Tax Act, 1961.
Whether the entity is an Individual, HUF, Partnership Firm, LLP, Trust, NGO, Society, or Company—if it makes payments that attract TDS (such as salary, rent, interest, professional fees, commission, or contractor payments), obtaining a valid TAN is mandatory.
Who Must Obtain TAN?
Every person or entity responsible for deducting or collecting tax at source (TDS/TCS) must apply for a TAN number. This includes both government and non-government deductors. TAN helps the department track tax deductions, ensuring smooth compliance and transparency.
Importance of TAN Registration
As per Section 203A of the Income-tax Act, 1961, every person who deducts or collects tax at source must quote TAN in the following documents:
- TDS/TCS statements and returns
- Challans for TDS/TCS payments
- Certificates issued to deductees
- Statement of financial transactions
Non-compliance can lead to penalties and disallowance of business expenses.
Consequences of Not Deducting or Depositing TDS
- 100% or 30% disallowance of related expenses under Sections 40(a)(i) and 40(a)(ia).
- Interest under Section 201(1A) at 1% or 1.5% per month.
- Penalty under Section 221 and Section 271C for non-deduction or non-payment.
- For NGOs, non-deducted expenses may not be eligible for exemption under Income Tax law.
Penalty for Not Obtaining or Quoting TAN
Under Section 272BB of the Income Tax Act, a penalty of Rs. 10,000 is imposed for failure to obtain TAN or for quoting an incorrect TAN in official documents.
Key Rules About TAN
- A single TAN can be used for all types of TDS and TCS deductions.
- PAN cannot be used in place of TAN.
- Government deductors are equally required to obtain TAN.
- Holding more than one TAN is illegal—surplus TANs must be surrendered.
- Any change in TAN details (address, name, etc.) should be updated with the department.
Documents Required for TAN Application
The following documents and details are generally required while applying for TAN registration:
- Basic entity details (Name, Address, PAN, Contact)
- Nature of business and type of deductor
- Authorized signatory details
- Proof of identity and address (in case of individuals)
Important Notes
No separate TAN is required for TCS if TAN for TDS already exists. The same number can be used for both purposes.
Professional Assistance
For TAN registration, TDS return filing, or compliance-related assistance, you can connect with:
SRTConsultancy & Co.
Email: help.srtconsultancy@gmail.com
Contact: 9315776867
Managed by CA Sandeep Rawat — Expert in GST, Income Tax, and Business Compliance.
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