New TAN Application

Introduction of TAN

The primary purpose of the Tax Deduction and Collection Account Number, commonly known as TAN, is related to deduction or collection of tax at source. Under Section 203A of the Income Tax Act, obtaining TAN is compulsory for individuals or businesses who are mandated by the government to deduct or collect tax.

Importance of TAN

Failure to quote TAN Number in documents can result in a penalty of Rs. 10,000. As per Section 203A of the Income Tax Act 1961, it is mandatory to quote TAN in the following documents:

(a) TDS statements i.e. returns

(b) TCS statements i.e. returns

(c) Statement of financial transactions or reportable accounts

(d) Challans for payment of TDS/TCS

(e) TDS/TCS certificates

(f) Other documents, as prescribed

What happens if you default?

Section 272BB of the Income Tax Act 1961 provides for a penalty of Rs. 10,000 in case the entity or individual collecting or deducting tax,fail to get the TAN or furnishes incorrect TAN details on the required documents.