TAN Number – Meaning, Format & Application Process in India

When tax is cut or collected, it needs to be tracked properly. A TAN number helps the Income Tax Department keep this information organised. This blog explains what a TAN number is, what it consists of, who needs it, and how to apply for it..

Key Takeaways

• TAN is a unique 10 character number which has to be quoted while filing or collecting tax at source under the Income Tax Rules.
• You may apply online with Form 134 or 135 along with a payment of ₹77 and submission of required documents.
• In case of furnishing incorrect or no TAN number on TDS/TCS statements or challans, you may be liable to pay a penalty of ₹10,000. 

What Is a TAN Number?

"TAN" stands for Tax Deduction and Collection Account Number. It refers to a 10-character alphanumeric code that the income tax department issues to a taxpayer who is eligible to deduct or collect tax at source. The person issued with TAN must quote the number in all TDS/TCS returns, payments, and certificates filed or issued by the deductor or collector.

Once you get a TAN, you have to write it on every TDS or TCS return, payment challan and certificate you issue. One TAN is enough for both TDS and TCS work. You do not need two different numbers.

Who Needs a TAN?

Anyone who has to cut tax at source or collect tax at source must get a TAN. This covers:

• Employers who cut tax from the salaries of their staff
• Companies or firms that pay contractors, professionals, rent or commission when the amount is above the limit fixed by law
• Businesses that collect tax on some sales or services

There are some exceptions. If you only cut tax under sections like 194IA (when buying property), 194IB (when an individual pays rent) or 194M, you can use your PAN in place of TAN. Government offices also need TAN.

If you already have one TAN, you can use the same number for both TDS and TCS. You do not have to apply again.A deductor or collector generally cannot have more than one TAN for the same entity, except when separate TANs are allotted for different branches or divisions.

Why Is TAN Important?

TAN helps the Income Tax Department match the tax you cut or collect with the returns you file. Without TAN you cannot deposit the tax properly or file the statements that are needed.

If you do not take a TAN when you should, or if you write the wrong TAN on returns, challans or certificates, you can get a penalty of ₹10,000. When you write the correct TAN, the person whose tax you cut can easily claim the credit in their own tax return.

TAN Number Format and Structure

Every TAN has exactly 10 characters. This is how the number is made:

For example: DELM12345L

Here, DEL is the code for Delhi, M is the first letter of the name, 12345 are the unique digits, and L is the check letter.

TAN Eligibility in India

Any person or organisation that has to cut or collect tax under the Income Tax Act can apply for TAN. This includes:

• Individuals and Hindu Undivided Families
• Partnership firms and Limited Liability Partnerships
• Companies and their branches
• Trusts, associations of persons and other bodies
• Central Government, State Government and local authorities

If you are not a government applicant, you must give your PAN when you apply. Companies also have to give their Corporate Identity Number. LLPs have to give their registration number.

Documents Required for TAN

The papers you need depend on whether you are a government body or not.

For non-government applicants (Form 135):

• Proof of identity
• Proof of address
• Proof of date of birth (for individuals) or date of incorporation (for companies and other entities)
• PAN of the applicant

For government applicants (Form 134):

• Accounts Office Identification Number (AIN)
• Certificate from the Pay and Accounts Officer, Treasury Officer or similar officer

Keep the papers ready and clear so that the application does not get delayed.

How to Apply for TAN Online

You can apply online or offline. Right now the forms are Form 134 for government and Form 135 for everyone else. The fee is ₹77, which includes GST.

These are the main steps if you apply online:

1. Go to the official TAN application page that is linked from the Income Tax Department website. Click on