Definition
Tax Deduction Account Number.
Number allotted to persons responsible for TDS.
Statutory Definition
Income Tax Act.
Etymology & Origin
Created alongside the TDS/TCS mechanisms to separately track entities acting as tax collectors on behalf of the government, distinguishing their collection duties from their own PAN-based tax liabilities.
Full Legal Analysis
A Tax Deduction and Collection Account Number (TAN) is a unique 10-digit alphanumeric number issued by the Income Tax Department. It must be obtained by all persons who are responsible for deducting tax at source (TDS) or collecting tax at source (TCS).
While PAN identifies the taxpayer, TAN identifies the tax deductor. Quoting TAN is mandatory in all TDS returns, TDS payment challans, and TDS certificates (like Form 16 or Form 16A) issued to deductees.
Failure to apply for a TAN or failing to quote it in the prescribed documents attracts a flat penalty of ₹10,000 under Section 272BB of the Income Tax Act.
Banks will not accept TDS/TCS challans for payment without a valid TAN, making it a critical operational requirement for any business.
For corporate advocates, ensuring that a new corporate entity or branch obtains a TAN immediately upon formation is a critical compliance check to avoid compounding penalties.
This Term in Indian Statutes
Income Tax Act, 1961, 1961
"Requirement to obtain tax deduction and collection account number."
Makes it mandatory for anyone deducting TDS to obtain a TAN.
