1. Legal Basis and Purpose
- Section 203Amandates obtaining a 10-digit alphanumeric TAN for entities deducting/collecting tax.
- Rule 114Agoverns the application process, replacing the redundant Rule 114AA (w.e.f. 8-12-2004).
2. Application Process
- Form 49B: Primary application form (online/offline).
- Online: Via NSDL TIN portal.
- Offline: Submit duplicate copies to TIN-FC centers.
- New Companies: Can apply via Form INC-7during registration (e-Biz portal).
3. Key Requirements
- Mandatory for:
- All deductors/collectors (including govt. DDOs).
- Entities making specified payments (e.g., salaries, contractor payments).
- PAN linkage: Required for validation.
- Indian address: Only domestic addresses accepted.
4. Validity and Compliance
- Single TAN per entity: Branches/divisions may obtain separate TANs.
- Quoting TAN: Mandatory in challans, TDS/TCS certificates, and returns .
- Amendments: File corrections for changes (e.g., address shift to another city requires new TAN).
5. Penalties
- Section 272BB: ₹10,000 for:
- Non-application or delayed application.
- Incorrect/non-quoted TAN.
- Prosecution: For illegal possession of multiple TANs.
6. Processing Details
- Allotment: NSDL forwards applications to ITD, which issues TAN electronically.
- Fees: ₹63 (₹55 + 14.5% service tax); additional charges for online payments.
- Timeline: Apply within 1 monthof first deduction/collection.
7. Cancellation
- Grounds: Duplicate TAN or discontinuation of tax operations.
- Process: Submit request to jurisdictional AO (TDS) with justification.
8. Recent Updates
- Digital tracking: Use acknowledgment number (SMS: NSDLTAN <space>AckNo to 57575).
- AIS integration: Real-time reconciliation for TDS/TCS filings.
Example: A company deducting contractor payments must apply for TAN before depositing TDS to avoid penalties.
Pro Tip: Verify TAN status via the “Know Your TAN” tool. For corrections, use the TRACES portal.
