TAN Application

TAN Application - An Overview 

We have all heard about the TDS deduction generally on our salary or on the fixed deposit interest. TDS is just another way to collect Income tax. The difference is that tax is collected at the source of income and hence the name for this tax is Tax Deducted at source. Likewise, the income tax department has Tax Collected at Source (TCS) mechanism which is a similar way to collect income tax. 

TDS is the amount deducted before the payment of the money by the company and treated as an expense by the company. Examples of TDS deduction are on the payments made via interest, salary, rent, professional fees, etc. 

Whereas TCS is the amount collected at the time of selling specified items stated by the tax department and treated as income for the company. TCS is collected for various items like forest products, timber selling, mines and quarries, toll plaza, etc.  

For the purpose of TCS and TDS, under section 203A of the Income Tax Act,1961 obtaining TAN is compulsory for individuals or businesses. The primary purpose of the tax deduction and collection account number, commonly known as TAN, is related to deduction or collection of tax at source. TAN is assigned to the payee and is essential in filing quarterly TDS returns. 

What is TAN? 

TAN is a Tax deduction and collection account number which is being assigned to any person who is required to deduct TDS and Collect TCS as per Income Tax Act, 1961. 

TAN number comprises of 10 alphanumerical digits.  

For example, the TAN number would look like this, “ABCD12345E” 

Here in the example, TAN contains 10 alphanumeric characters. The first four are alphabets, the next five are numbers and the last character will again be an alphabet. 

This number must be quoted in all documents pertaining to TDS (Tax Deducted at Source). TAN is mentioned on TDS challans and certificates. In case the TAN has not been quoted, we cannot claim TDS in our returns. The same TAN can be used by an individual for both TDS and TCS. The governing body for the issuance of TAN is NSDL-TIN. 

No specific document is required, when TAN is applied online for individuals.  They can just submit the application form along with prescribed fee for the application. 

If any document is demanded after submission of the application, then it can be provided accordingly. 

 When application is made offline, the submission of KYC documents becomes essential.  And such documents are, 

For individuals: 

• Passport size photo 

• Aadhar card 

For partnership firm: 

• Passport size photo – Authorised partner 

• ID proof – All partners 

• Address proof – Business location 

• Partnership Deed 

• Bank Account Statement of the firm 

TAN is mandatory for various legal documents such as TDS/TCS returns, certificates and payment challans. A person who may apply for TAN can be: 

1. an Individual 
2. a Sole proprietor or HUF  
3. any Firm 
4. an Association of Persons/ a Body of Individuals etc. 
5. A Company 
6. The Central/State Government/Local Authority 

As per the NSDL-TIN website,

• An applicant will fill Form 49B online and submit the form. 
• If there are any errors, rectify them and re-submit the form.
• A confirmation screen with all the data filled by the applicant will be displayed. 
• The applicant may either edit or confirm the same. 

Step by step procedure of for online application of TAN 

There are two ways to apply for TAN. application One is an online application through with Digital Signature Certificate. 

Another one is the offline method. 

Procedure for TAN: 

 Here is how a person can apply for TAN online:  

Step 1: Open tin-nsdl Website  

Step 2: Choose TAN under services  

Step 3: Select Apply TAN online  

Step 4: Fill Form 49B online  

Step 5: Applicant needs to mention Assessing Officer Code. 

Step 6: A confirmation of the submission of the form with the details filled by the applicant is shown on screen.  

Step 7: In case if there is any mistake, the equivalent is required to be amended or corrected and the form should be re-submitted.  

Step 8: After the successful submission of the form, an acknowledgment will be generated. 

Step 9: DSC validation is performed 

Step 10: The website will take you to the payment gateway for TAN application fees. 

Procedure after TAN Application 

 Offline method of TAN application starts with manual completion of TAN application form ie., Form 49 B.  It has to be submitted along with necessary documents and the prescribed fee. Once the form is filed, a 14-digit acknowledgment number will be generated. This acknowledgment has to be signed by the applicant and attested by a Magistrate or a Notary Public or Gazetted Officer under official seal and stamp.  

The acknowledgment duly signed, along with the demand draft, if any, shall be sent to the NSDL addressing:
NSDL e-Governance Infrastructure Limited,
5th floor, Mantri Sterling,
Plot No. 341, Survey No. 997/8,
Model Colony,
Near Deep Bungalow Chowk,
Pune – 411016