TAN is Tax Deduction and Collection Account Number. It is a 10 digit alphanumeric number. This number has to be attained by people who are accountable for deducting tax at source or collecting tax at source. It is compulsory to quote your TAN in TDS or TCS return, payment, certificates, Annual Information Return and other documents.
Every person whose taxes are deducted at source or those who collect tax at source are required to obtain TAN. If a person fails to apply for TAN or do not quote the TAN in the specified documents, then the person will get a penalty of Rs.10,000.
An applicant cannot provide their PAN number in the field where TAN is required to be mentioned and both these number serve different purposes. TAN is an unique identification number that is given to those who are deducting or collecting taxes at source on behalf of the Income Tax Department, PAN is an unique number given to assesses that is individuals and companies.
If you are paying salary or a commission to anyone else, you should have TAN. This includes central or state government or a local authority. It can be a statutory or an autonomous body, a company, a branch or a division of a company, individual or a Hindu Undivided Family, sole proprietor, firms, associations of persons or trusts.
Application for new TAN can be made by filling and submitting form 49B at any of the TIN facilitation centers meant for receiving e-TDS returns. TAN is allotted to such applicant entities by the Income TAX Department. TAN can be applied for either by visiting the Income Tax Department or by making online application at the Income Tax official website.
Application for issue of TAN can only be made via form 49B. In case of physical applications, no supporting documents are required to be furnished to the Income Tax Department. However, for online application, the acknowledgement received after submitting form 49B is to be saved and sent to the Income Tax Department as proof.
If TAN application is being made online then the print of the acknowledgement received needs to be sent to the Income Tax Department. Acknowledgement of TAN is received as soon as form 49B is submitted to the NSDL website. For physical filling and submission of form 49B, copy of PAN CARD is required