In India, the Tax Deduction and Collection Account Number (TAN) is a unique 10-digit alphanumeric code issued by the Income Tax Department. TAN is exclusively used for tax deduction at source (TDS) and tax collection at source (TCS) purposes.
Mandatory Requirement:
– TAN is compulsory for entities responsible for deducting or collecting tax at source, including:
– Businesses
– Individuals
– Entities making payments subject to TDS or TCS provisions
TDS and TCS:
– TDS: Tax deducted by a person while making payments like salaries, interest, rent, etc., which are subject to income tax
– TCS: Tax collected by sellers at the time of sale of specified goods, collected from the buyer
Structure:
– TAN is a 10-character alphanumeric code
– First four characters are letters, next five are numbers, and the last character is a letter (e.g., ABCD12345E)
