Registering TAN on the Income Tax Portal

If you are a taxpayer or will pay taxes for the first time, you may be familiar with the term ‘TAN’. The Tax Deduction Account Number (TAN) is a unique 10-digit alphanumeric code issued by the Income Tax Department of India. 

It is compulsory for all entities that are required to deduct tax at source (TDS). Applying and completing the TAN registration process on the tax portal ensures compliance with tax laws, Moreover, it helps avoid penalties associated with non-compliance. 

Read on to learn more about the process of TAN registration on the Income Tax Portal. 

TAN is a term which comes under Section 203A of the Income Tax (1961). It is a unique 10-digit code issued to you by the IT department, if you are required to deduct tax at a source or collect tax at a source. 

The primary purpose of TAN is to identify the tax deductor or collector and ensure that their tax payments are credited to the correct account. Therefore, the TAN registration number is quoted on all TDS/TCS returns, challans, and certificates submitted to the Income Tax Department.

TAN has a unique structure and helps streamline the tax deduction and collection process.

• The first 4 characters are alphabets, followed by 5 digits in binary form, and the last character is again an alphabet.

• The first 3 alphabets of the TAN represent the authority codes.

• The initial alphabet of the 4th digit of the TAN represents the name of the TAN holder, which can be an individual or a business entity.

Obtaining a Tax Deduction and Collection Account Number (TAN) is a crucial requirement for any entity responsible for deducting or collecting taxes. Here are some benefits of obtaining a TAN:

• By obtaining a TAN, you can ensure compliance with tax laws and avoid legal action or penalties for non-compliance. It is mandatory for all entities responsible for deducting or collecting tax at source.

• With a TAN, you can streamline tax deduction and collection processes. This helps you deduct and remit taxes to the government promptly and error-free, avoiding any delays or mistakes in the process.

• Having a TAN facilitates easier tracking and reconciliation of tax payments. You can easily access your TDS/TCS statements and certificates, ensuring that you have deducted and remitted the correct amount of tax. This makes it easier to keep track of your tax payments and ensure compliance with tax laws.

Non-compliance with TAN registration requirements can attract penalties under the Income Tax Act of 1961.

Here are some of the penalties that can be imposed for non-compliance with TAN registration:

• If you fail to obtain TAN despite being required, you may have to pay a penalty of ₹10,000 as per Section 272BB of the Income Tax Act, 1961.

• You must register for TAN within the specified timeframe. If you fail, you can be penalised ₹10,000 under Section 272BB of the Income Tax Act, 1961.

• Providing incorrect information while registering for TAN can attract a penalty of ₹10,000 under Section 272B of the Income Tax Act, 1961.

• Non-compliance with TAN registration requirements may result in legal action, fines, and imprisonment. So, comply with the TAN registration process to avoid any such penalties or legal actions.

Since non-compliance regarding TAN registration can attract a penalty, ensure you don’t overlook it. Moreover, it streamlines tax deduction and collection processes and facilitates easier tracking and reconciliation of tax payments. Therefore, you should complete TAN registration online and ensure compliance with tax laws to avoid penalties and legal action.