In the realm of tax compliance in India, one of the most crucial yet often misunderstood components is the Tax Deduction and Collection Account Number—commonly known as TAN. Whether you’re a business owner, a salaried employer, or a deductor of any kind, understanding TAN registration is essential for ensuring seamless and lawful compliance with TDS (Tax Deducted at Source) provisions.
This blog provides a detailed overview of TAN registration, its importance in the TDS process, who needs it, how to obtain it, and why proper handling is vital for businesses, especially in Kerala. If you need professional support with TAN or TDS compliance, visit OurTaxPartner.com for expert assistance.
What is TAN?
TAN, or Tax Deduction and Collection Account Number, is a 10-digit alphanumeric code issued by the Income Tax Department of India. It is mandatory for anyone responsible for deducting or collecting tax at the source. TAN is used to track all TDS payments and is a prerequisite for filing TDS returns, issuing TDS certificates, and generating Form 16/16A.
Example of TAN format: CHEP01234A
Why is TAN Important?
TAN serves as an identifier for entities deducting tax at source. Without a valid TAN, deductors cannot:
- Deposit TDS with the government
- File quarterly TDS returns (Form 24Q, 26Q, 27Q, etc.)
- Issue TDS certificates to employees or vendors
- Avoid penalty notices from the Income Tax Department
Failure to apply for TAN when required may attract a penalty of ₹10,000 under Section 272BB of the Income Tax Act.
Who Needs TAN Registration?
The following entities are required to obtain TAN:
- Employers paying salaries and deducting TDS under Section 192
- Businesses making contractor, rent, commission, or professional payments (Sections 194C, 194I, 194J, etc.)
- Companies collecting tax at source (TCS)
- Government departments, educational institutions, NGOs, hospitals, and trusts making payments subject to TDS
Even if you’re running a small business in Kerala, if you’re making payments that exceed threshold limits for TDS deduction, you are legally obligated to apply for and use TAN.
How to Apply for TAN in India
The process of obtaining TAN is fairly straightforward and can be completed online or through a physical application.
Steps for Online TAN Application:
- Visit the NSDL-TIN website
- Select “Apply Online” and choose Form 49B
- Fill in the required details (business name, PAN, address, responsible person, etc.)
- Submit the form and make a nominal payment (Rs. 65 + GST)
- Save the acknowledgment number
- You will receive your TAN by post within 7–15 working days
Offline Application:
Alternatively, Form 49B can be filled and submitted at a TIN-Facilitation Centre along with the payment. TAN allotment remains the same in both methods.
If this process seems cumbersome, businesses can opt for professional services such as OurTaxPartner.com, who offer end-to-end support with TAN registration, TDS compliance, and ongoing tax filings.
How TAN is Linked to TDS Compliance
Once TAN is allotted, it becomes the identity for all your TDS-related activities. Here’s how TAN is integrated into the TDS lifecycle:
- Used to deposit TDS via Challan ITNS-281
- Mandatory for filing quarterly TDS returns (Form 24Q for salary, 26Q for non-salary payments, 27Q for NRIs)
- Appears on TDS certificates (Form 16/16A) issued to payees
- Mapped to PANs of deductees while reporting transactions
- Used by the Income Tax Department to track deductions and match against 26AS statements
Incorrect quoting of TAN or filing TDS returns without it results in rejection of returns and notices from the CPC (TDS). Hence, accuracy and timeliness are critical.
Penalties for Non-Compliance Related to TAN
- Failure to apply for TAN – ₹10,000 penalty under Section 272BB
- Incorrect TAN in TDS return – ₹10,000 penalty
- Failure to quote TAN in challans, certificates – possible rejection and interest levies
- Late or non-filing of TDS returns – ₹200 per day penalty under Section 234E
These penalties can quickly accumulate and create unnecessary financial and legal pressure on your business.
Benefits of Professional TAN and TDS Compliance Services
Given the legal sensitivity around TAN and TDS, many Kerala-based businesses are now turning to compliance experts. Services like OurTaxPartner.com offer a wide range of support, including:
- Assistance in applying for TAN online or offline
- TDS challan preparation and timely deposit
- Quarterly TDS return filing (Form 24Q/26Q/27Q)
- Form 16/16A generation and distribution
- TRACES portal assistance and 26AS reconciliation
- Correction filing and compliance audits
Conclusion
TAN registration is not just a procedural requirement—it’s the backbone of lawful TDS operations in India. If you’re a business or individual liable to deduct or collect tax at source, failing to register for TAN can expose you to penalties and non-compliance consequences.
By partnering with experienced consultants such as OurTaxPartner.com, you can handle all your TDS responsibilities—from TAN registration to return filing—with efficiency and peace of mind.
Start your TAN registration and full-service TDS compliance journey today with www.ourtaxpartner.com/filing-service/tds-compliance/.
