TAN Full Form & Meaning- The full form of TAN is Tax Deduction and Collection Account Number. It is a ten-digit alphanumeric number allotted to any person under the Income-tax Act, 1961, required to deduct TDS, i.e., tax deducted at source while processing any payment as specified under the rent, commission, professional and technical payment, etc.
Structure of TAN Number- As a 10 digit alphanumeric identifier. Tan has a unique structure with the first 4 letter at the beginning. TAN has 5 numerals in the middle and a letter at the end. The components of TAN represents the following:
- The first 3 letters represents the jurisdiction where the TAN was issued.
- The 4th alphabet in the TAN is the initial letter of the name of the individual or entity deduction or collecting tax.
- The remaining 6 characters (5 numerals & the last alphabet) are system generated.
Example :- DCBA98765G
Benefits of TAN Number
- TAN number, within itself, does not hold any benefits for the assessee except escaping from the file by complying with a legal requirement.
- It is also known as TDCAN, which sorts, identifies, and matches the number of TDS. TCS deducts, collects, and provides necessary credit to the person against whose income tax liability TDS/ TCS deducts.
- Overall, we can say that TAN provides benefits to income tax authorities for collecting tax at the point of time when income gets accrued.
How to Apply for TAN
A person may apply for TAN either through online mode or offline mode. It is easy, and one can follow the following steps to get their TAN number.
- Income tax authorities allot TAN numbers. In the case of the online application, an applicant must fill 49B online and submit the same along with application nominal fees. In the case of offline application, an applicant for allotment of TAN needs to file form 49B and submit it at any of the TIN Facilitation Centers.
- One can also submit the application form online. Once after filing an application and submitting it the same at facilitation centers, an applicant will be allotted TAN subject to the condition that they must find no discrepancies in the application. It will generate an acknowledgment number after applying. One can track this number online at the income-tax website.