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
| Section | Nature of Payment | Rate |
|---|---|---|
| 192 | Salary | As per slab |
| 194A | Interest (other than securities) | 10% |
| 194C | Contractor payments | 1%/2% |
| 194H | Commission/Brokerage | 5% |
| 194I | Rent | 2%/10% |
| 194J | Professional/Technical fees | 10% |
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
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