TAN

TAN, or Tax Deduction and Collection Account Number, is a 10-digit alphanumeric code issued by the Income Tax Department in India. TAN is specifically used for the purpose of tax deduction at source (TDS) and tax collection at source (TCS).

  1. Mandatory Requirement:
    • TAN is mandatory for entities that are responsible for deducting or collecting tax at source. This includes businesses, individuals, and entities making payments that are subject to TDS or TCS provisions.
  2. TDS and TCS:
    • TDS is the tax deducted by a person while making payments such as salaries, interest, rent, etc., which are subject to income tax. TCS is the tax collected by sellers at the time of sale of specified goods, and it is collected from the buyer.
  3. Structure:
    • TAN is a 10-character alphanumeric code. The first four characters are letters, the next five are numbers, and the last character is again a letter. For example, ABCD12345E.