TAN or Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. It is compulsory to quote TAN in all TDS/TCS returns (including e-TDS/TCS return), TDS/TCS payment challans and TDS/TCS certificates.
The provisions of Section 203A of the Income-tax Act, 1961 require all persons who deduct or collect tax at source to apply for the allotment of TAN. The section also makes it mandatory to quote TAN in all TDS/TCS/Annual Information Returns, payment challans and certificates to be issued. If TAN is not quoted, TDS/TCS returns will not be accepted by TIN-Faciliation Centres (TIN-FCs) and challans for TDS/TCS payments will not be accepted by banks. Failure to apply for TAN or not quoting the same in the specified documents attracts a penalty of Rs. 10,000.
All those persons who are required to deduct/collect tax at source on behalf of Income Tax Department are required to apply for and obtain TAN.