TAN Full Form – Tax Deduction & Collection Account Number

TAN Full Form: TAN stands for Tax Deduction & Collection Account Number. The TAN number was introduced in 1961. TAN is issued to government agencies, employees, companies, and individuals, who are responsible for paying or deducting taxes on various payments like salaries, rent, and professional fees.

What is the Full Form of TAN?

The Full form of Tan is Tax Deduction & Collection Account Number. TAN is a unique identification number used for checking these tax deductions & collections ensuring people’s compliance with tax regulations. TAN enables accurate & transparent tax reporting and payment. It is illegal for individuals or entities to hold or use more than one TAN.

Structure of TAN

The structure of TAN is discussed below:

• TAN number is a 10-digit alphanumeric code structured as 4 letters, followed by 5 numbers ending with a letter making it a 10-character code.
• The starting 4 characters are letters representing the jurisdiction code of the respective Income Tax accessing officer who issues the TAN.
• The next 5 characters are numeric and unique for each TAN even issued under the same jurisdiction.
• The last character is the letter used for validation purposes.

Is the TAN number mandatory for Taxpayers?

It is very much essential for taxpayers to use their TAN while making tax deductions (or) collections while filling their TDS/TCS returns with IT Department

No organization can pay tax without a TAN number. It is a mandatory requirement for entities responsible for deducting/ collecting taxes.

Started, with the implementation of the TDS System (Tax Deducted at source, a method to collect taxes at the source itself ensuring a regular & steady flow of revenue to the government), under section 203A of IT Act 1961, it is mandatory to quote TAN allotted by IT Department on all TDS statements.

How to Apply TAN Application Form?

The process to apply for TAN is showing below:

1. Get the 49B form from the IT Department’s website.
2. Fill out the form with your details.
3. Submit the form with the required documents & pay the fee (65 excluding GST which is 18% of the original fee), which is a Total of 77 INR (proof, address proof, PAN Card copies).
4. Receive the acknowledgement receipt.
5. Wait for verification & allotment of TAN.
6. You will get it through email.

Conclusion

The primary purpose of the tax deduction and collection account number is related to the deduction or collection of tax at source. Under section 203A of the income tax act, obtaining TAN is compulsory for individuals or businesses mandated by the government to deduct or collect tax. By streamlining the processes of tax deduction and collection, maintaining transparency, and ensuring proper accountability, TAN significantly contributes to the efficient functioning of the tax ecosystem.