What is the full form of TAN

TAN: Tax Deduction and Collection Account Number

TAN stands for Tax Deduction and Collection Account Number. It is issued by Income Tax Department of India to those individuals and firms who are required to deduct or pay tax on payments made by them, under the Income Tax Act, 1961. Under Section 203A of the Income Tax Department, it is mandatory to provide the TAN in all TDS returns and Challans while paying tax.

So, TAN is the account number which is used to pay the tax, without having a TAN you can?t pay the tax. On receiving the tax amount the income tax department verifies the amount and if the taxpayer has deposited an extra tax by mistake then the extra tax will be credited back into his account.

Format of a TAN

TAN is a ten-digit alphanumeric number. The first three letters of TAN represents a city, the fourth letter is the initial of the taxpayer and the next five numbers and the last letter make the TAN unique.

How to apply for TAN

• For TAN fill up the form no. 49B. Then attach all the required documents such as identity proof and address proof and submit it at the website of NSDL or Tax information network facilitation centre.
• On receiving the TAN application form, the NSDL department verifies the details and sends the application form to income tax department.
• The Income tax department approves the application and sends a unique number (TAN) to the NSDL department.
• The NSDL department informs the applicant about the TAN.