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Read MoreWhat is TAN Registration?
TAN, or Tax Deduction and Collection Account Number, is a unique 10-digit alphanumeric identifier issued by the Income Tax Department. It is primarily used by individuals or entities responsible for deducting or collecting tax at source (TDS/TCS).
TAN Registration Number: Definition and Configuration
The TAN registration number, abbreviated as TAN, is structured as follows:
First Four Characters (Alphabetic): The first three characters indicate the jurisdiction where the TAN was issued, while the fourth character signifies the first letter of the entity or individual’s name applying for the TAN.
Middle Five Characters (Numeric): These five characters are system-generated unique numbers.
Final Character (Alphabetic): The concluding character is a system-generated letter.
Who Should Obtain a TAN?
TAN registration is essential for:
Tax Deducting Entities:Individuals or organizations required to deduct tax at source during transactions such as salary distributions, contractor payments, or rent etc.
Non-Profit Organizations: Non-profits making specific payments above designated thresholds.
Business Branches: Branches of companies executing payments that exceed set limits.
Salaried Individuals: Those earning a salary do not require a TAN for tax deductions.
The Importance of Securing a TAN Number
According to Section 203A of the Income-tax Act, 1961, anyone responsible for deducting or collecting tax at source must obtain a TAN. It is mandatory to incorporate the TAN in various documents, including:
TDS or TCS statements/returns
TDS or TCS statements/returns
Issued TDS or TCS certificates
Forms and documents related to income tax procedures
