TAN is Tax deduction and collection account number. TAN itself is a number so no point in writing as TAN Number.However generally people call TAN as TAN Number. So what is a TAN?.
As it’s name says Tax deduction and collection Account Number is an account number allotted by Income tax department. As per section 203 A of income tax it is mandatory to have TAN for all persons who are responsible for the deduction of TDS under Income tax Act and they should quote TAN number on all TDS returns, TDS Payment challans,TDS Certificates.Penalty up to 10000 may be charged in case he failed to apply for TAN or failed to quote or Quoted incorrect TAN.
There is an exemption for this rule. A person who is responsible for the deduction under section 194IA can use PAN instead if TAN.
Structure of TAN
TAN is a 10 digit alpha numeric number. The first four characters are letters then next 5 are digits and the last one is again a letter. Usually a TAN number appears like BLRH12345Z
- The first three letters represents the city or state where TAN was issued.
- The fourth character represents the first letter of the deductor. A deductor may be a company,person or a firm.
- Next 5 digits are the system generated serial numbers.
- The last charector is also a system generated letter which is called check digit.