Tax Matters – Tax Deduction and Collection Account Number (TAN) in India

Tax Deduction and Collection Account Number (TAN) in India 3E Accounting spills the beans on everything you need to know about the tax deduction and collection account number (TAN) in India.

Taxation is central to managing the cost of running a country. In India, taxes are the largest source of revenue for the Government. Taxes facilitate the growth of a nation and the smooth running of all civil procedures. The general rule is that you will need a Tax Deduction and Collection Account Number (TAN) in India. This is applicable if you fall within the category of persons required to:

  • Deduct tax at source (TDS) of payments, or
  • Collect tax at source (TCS) on payments made

Exceptions to this general rule fall under Section 194 of the Income Tax Act. Companies which are not registered also have different compliance requirements. For more information on this, check out the Indian Tax Department or speak to an industry professional such as 3E Accounting.

A TAN is issued by the Income Tax Department and is considered mandatory by virtue of the Income Tax Act 1961. It is needed for all taxation matters and failure to apply for, or quote, a TAN can incur financial penalties. TAN must be stated on all TDS or TCS statements, financial statements, accounts, etc.


Applying for a TAN

Only one TAN is necessary for all types of deductions and collections. However, branches or divisions of a company can have separate TANs. To apply for a TAN, you will need to fill Form 49B. The form can be downloaded from the Tax Department’s website. You can also fill and submit the form:

  • Online at the National Securities Depository Limited or NSDL e-Governance website
  • Physically at all Tax Information Network Facilitation Centres (TIN-FC)

There is no requirement to submit any supporting documents during the application. However, all online submissions will be issued a signed acknowledgement of application. This acknowledgement will have to be forwarded to the NSDL. They will then verify all information, and valid applications will be submitted to the Income Tax Department for further processing. Upon approval, the Tax Department will issue a TAN, which will then be sent to the NSDL to deliver to the applicant.

All TANs have ten alphanumeric characters (e.g. MUMA12345B). The first three alphabets represent the state from which the TAN has been issued (e.g. MUM stands for Mumbai). The fourth alphabet is the first character of the applicant’s or company’s name (e.g. A stands for Accounting). The subsequent five numbers and one alphabet act as a verification code specific to the applicant.
For more information on compliance requirements, get in touch with 3E Accounting, which has years of industry experience. You may be looking to get a tax deduction and collection account number (TAN) in India. You may just need a little help in incorporating your company. You may even need a series of solutions ranging from licensing to office rentals to website design. Whatever it is, rest assured that 3E Accounting has you covered.

Contact 3E Accounting for all your customizable business needs delivered with professional panache.
Tax Deduction and Collection Account Number (TAN) in India