TAN (Tax Deduction and Collection Account Number)

TAN (Tax Deduction and Collection Account Number) is a unique 10-digit alphanumeric number required by all entities responsible for deducting or collecting tax at source (TDS/TCS). It is issued by the Income Tax Department.

Structure of TAN

Example: MUMB12345A

• 1-4: Alphabetic (City/State code + first letter of name)
• 5-9: Numeric (Sequential number)
• 10: Alphabetic (Check character)

Who Needs TAN?

• Companies paying salary to employees
• Businesses making payments subject to TDS
• Entities collecting tax at source (TCS)
• Government offices
• Any person required to deduct tax

Common TDS Sections

SectionNature of PaymentRate 192SalaryAs per slab 194AInterest (other than securities)10% 194CContractor payments1%/2% 194HCommission/Brokerage5% 194IRent2%/10% 194JProfessional/Technical fees10%

TAN Obligations

• Quote TAN in all TDS/TCS challans and returns
• File quarterly TDS returns (Form 24Q, 26Q, 27Q, 27EQ)
• Issue TDS certificates (Form 16, 16A)
• Deposit TDS by 7th of following month

Penalty

• No TAN: Rs. 10,000 penalty
• Wrong TAN: Rs. 10,000 penalty
• Late filing: Rs. 200 per day